The US government has announced the recovery of over $1.3 billion from wealthy taxpayers since late 2023. This success story is part of a larger effort to ensure that high-income individuals are paying their fair share of taxes.
The move comes after a concerning trend emerged during the previous administration. Between 2010 and 2018, the audit rate for millionaires dropped by a staggering 80 percent. This led to a situation where the burden of unpaid taxes shifted disproportionately onto lower-income individuals.
Treasury Secretary Janet Yellen, in prepared remarks for a speech, highlighted this alarming trend. “And during the previous administration, as audit rates on high-income taxpayers fell, the share of audits on taxpayers with incomes under $200,000 increased,” she stated.
The issue of tax policy has taken center stage as the US heads towards the November presidential election. Both Democratic presidential hopeful Kamala Harris and her Republican rival, former President Donald Trump, have presented proposals aimed at wooing taxpayers with promises of financial relief. Notably, Vice President Harris has advocated for raising taxes on wealthy individuals.
These proposals come on top of existing efforts to collect unpaid taxes. Secretary Yellen emphasizes the significant burden borne by ordinary Americans due to tax evasion by the wealthiest. “In 2019, the top one percent of Americans was estimated to owe over one-fifth of unpaid taxes, leaving ordinary Americans to shoulder the burden,” she notes.
In late 2023, the US Treasury launched a dedicated initiative to pursue high-income individuals who had failed to pay their recognized tax debt. This initiative has yielded impressive results, with nearly 80 percent of 1,600 millionaires making payments, totaling over $1.1 billion in recovered funds.
Adding to this success, another effort was initiated in early 2024, focusing on high-earners who had not filed taxes since 2017. This initiative has brought in an additional $172 million in taxes.
The US government’s commitment to cracking down on tax evasion, particularly among the wealthy, signals a shift in priorities. By pursuing these initiatives, the administration aims to ensure that the tax burden is distributed fairly and that high-income individuals contribute their fair share to the nation’s coffers.
