Opinion: Jack Lew: How to get the rich to pay the taxes they owe
Reporting this data is so critical because it gives the IRS a warning when a taxpayer’s true financial position – as reflected in aggregate account flows – differs from what was reported.
It is a scandal that the rich, who are more likely to avoid paying taxes, are so often given a pass. Improved reporting, along with more officers trained to decipher complex tax returns, will allow the IRS to target high-end enforcement actions instead of focusing on low-income taxpayers.
Lobbyists who want to protect the status quo claim that better reporting would discourage people of color from using the banking system. These claims are false. They ignore that the policy is carefully designed to protect privacy and imposes no burdens on individuals, and in fact would increase income to pay for initiatives that encourage households of color to become banked. Monthly child tax credit payments, for example, can be directly deposited into bank accounts.
Congress is expected to adopt this important provision. This will generate substantial income and create a fairer tax system, where all people – not just ordinary American workers – pay what they owe.