The WSJ had an interesting story on how tax-avoidance by the wealthy is far larger than previously thought. A study by IRS researchers and academic economists estimates that the top 1% of households fail to report about 21% of their income, and unreported income could be twice that for the top 0.1%. It's good to be a billionaire.
Referencing the study, the IRS Commissioner recently asked Congress for more resources contending that each additional dollar spent on tax enforcement could yield $5-$7 in revenue and result in perhaps as much as $1 trillion of additional collections over a decade, without raising any taxes.
One of the co-authors of the study is Gabriel Zucman, a leading economist on income equality. His research reveals the striking disparity in income distribution in the U.S. starting in the 1980s. Looking at average annual real income growth rates (1.4%) between 1980 and 2018, the median American's income grew by less than 0.5% per annum while the top 0.001% group's income shot up by 6% per annum. Notice prior to the 1980s, results were very different--average income growth (2%) was fairly even across all income percentiles; in fact the income of the richest Americans actually grew at a slower rate (1%) than that most of the population (click chart below to enlarge).
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