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April 12, 2004

Why corporations don't pay taxes...

As detailed in this post, corporations increasingly don't pay taxes. Here's at least one reason why-- the drop in IRS audits:

Why this drop in audits? Because the Congress ordered the IRS to stop auditing the wealthy and instead audit the poor. Under the old Gingrich Congress in the late 90s, the IRS was starved of funds, then told to direct a large share of its remaining funds to investigating the EITC credits used by the working poor-- and therefore spend less time auditing the wealthy.

Molly Ivins in this column detailed the problem, then quoted former Treasury Secretary Paul O'Neil on how Congress had tied his hands:

Former Treasury Secretary Paul O'Neill blamed the situation squarely on Congress. "We've been directed by Congress to examine the devil out of such [EITC] returns," he told a congressional committee. "You think I like that? I hate that."

Of course, O'Neill was soon fired to be replaced by someone who enjoyed applying the IRS screws to the working poor, while letting corporate scofflaws get away tax free.

Posted by Nathan at April 12, 2004 07:29 AM