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But some significant part of the disparity is the result of intentional evasion, non-payment, or underpayment. The question is why. Why are so many Americans willfully and flagrantly violating our tax laws?
Generally speaking, people refrain from committing crimes not because they fear sanctions if they do, but because they believe it is morally wrong to engage in the conduct prohibited. In the case of paying taxes, lots of people apparently believe it’s not morally wrong to fail to pay what’s owed. Suspicion of taxes is deeply rooted in our national psyche, going back to the Boston Tea Party of 1773 and the Whiskey Rebellion of the early 1790s.
In the current political climate, taxes have been so demonized that many citizens regard taxation itself as wrongful. And if people believe that taxation itself is wrongful, then it would seem to follow that such people would also believe that the failure to pay taxes is not wrongful.
If people really believe that “everyone else is doing it” – that everyone else is failing to pay the taxes they owe — it’s no wonder they think it’s okay for them to do the same thing.
Whether one is a liberal who thinks that more of the tax burden should be shouldered by the very rich, or a conservative who believes that the government shouldn’t be in the business of supporting the poor, one is likely to be dissatisfied both with the formula that determines who pays what, and with what our government decides to spend the money on.
In such an environment, it’s not surprising that some people would believe that non- or under-payment of taxes is not only not wrongful, but is actually justified.
With respect to the nation’s largest corporations (those reporting assets of $250 million or more), the IRS has, since 2005, sharply reduced both the number of audits conducted and the amount of time it spends on each audit. There are also serious geographical disparities in tax enforcement: Residents of California, for example, are much more likely to be audited and prosecuted than residents of the New York metropolitan area. Such irregular enforcement practices not only leave potential tax dodgers undeterred, but also send a message that the obligation to pay taxes is not really that important.
Still, tax revenues are the fuel that keeps the engine of government running, and it’s essential to our democracy that everyone do their part to help pay the debts our society collectively incurs.