According to Markets Insider, a new National Bureau of Economic Research study by economists Larry Summers and Natasha Sarin suggests that the Internal Revenue Service could boost tax collection by $1 trillion over the next 10 years without any tax increase — just by increasing audits, improving their information technology and reporting requirements, and therefore collecting unpaid taxes that people already owe.
Such an overhaul would require around a $100 billion boost to the IRS budget, they estimated — meaning it would more than pay for itself.
“Almost everyone involved in public-policy debates agrees that it would be good if the federal government could collect more revenue without raising tax rates or reducing tax deductions or credits,” wrote Summers and Sarin in an overview in the Washington Post. “It should be indisputable that investment to make sure all citizens meet their tax obligations is desirable.”
One of their most notable findings is that under the current system, around $7.5 trillion in taxes will go uncollected by 2029 — and that 70 percent of it will be taxes owed by the top 1 percent of earners.
Despite the top 1 percent’s overwhelming share of uncollected taxes, an investigation in May by ProPublica found that the IRS audits these earners at a rate of just 1.56 percent — which is just slightly more than the rate at which the IRS audits claims of the earned income tax credit (EITC), a program used mainly by people who make less than $20,000 a year.