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Tackling the Tax Gap: What Can Be Achieved?

Increasing enforcement of existing laws instead of increasing taxes is an appealing way to raise revenue.

But would stronger enforcement have costs for law-abiding taxpayers too?

On this episode of The Deduction, host Jesse Solis and Federal Policy Analyst Alex Muresianu discuss the tax gapThe tax gap is the difference between taxes legally owed and taxes collected. The gross tax gap in the U.S. accounts for at least 1 billion in lost revenue each year, according to the latest estimate by the IRS (2011 to 2013), suggesting a voluntary taxpayer compliance rate of 83.6 percent. The net tax gap is calculated by subtracting late tax collections from the gross tax gap: from 2011 to 2013, the average net gap was around 1 billion. , what it is, how the U.S. compares to other countries, and recent proposals aimed at closing it.

They also explore how much revenue could actually be raised through increased taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. enforcement, the current challenges the IRS faces, and how stronger enforcement could impact taxpayers at large.


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