The richest 25 Americans pay a much lower percentage in taxes every year than many ordinary workers do, according to an investigation released this week by nonprofit news organization ProPublica.
Oregon U.S. Sen. Ron Wyden said in an IRS budget hearing before the Senate Finance Committee on Tuesday that the uber-wealthy in some cases can bring their federal taxes down to nearly nothing, while using perfectly legal tax strategies.
“So this is another example of the tale of two tax codes,” Wyden said. “You’ve got the nurse in Medford, Oregon, this morning, treating COVID patients; they pay taxes with every paycheck. But if you’re a millionaire who can arrange their assets through a sophisticated, complex web of partnerships, you can abuse the system, essentially, with impunity.”
Wyden also said wealthy taxpayers who exploit tax loopholes have “a better chance of being struck by lightning than being audited.”
Wyden introduced a budget proposal for the IRS that would tighten tax enforcement and close some of the loopholes that make the disparities possible. His proposal would tax capital gains in much the same way wages are taxed.
It would also give the finance committee the authority to regulate paid tax preparers.
Regarding the leak of taxpayer data at the heart of the ProPublica investigation, IRS Commissioner Charles Rettig said at the hearing that his bureau is investigating, and that any violations of law would be prosecuted.
“We will find out about the ProPublica article,” Rettig said. “We have turned it over to the appropriate investigators, both external and internal.”
The Associated Press contributed to this report.