Treasury Secretary Geithner Urges Tax Enforcement
March 5, 2009
This week, Treasury Secretary Timothy Geithner announced plans to go after tax evaders and avoiders. Awkward, right? Anyways, the details:
“Over the next several months,” he said Tuesday, “the President will propose a series of legislative and enforcement measures to reduce such U.S. tax evasion and avoidance.”
As a lawyer, I don’t disagree with the need to enforce the law and collect what is legally owed. But it must be said that a good part of the “tax gap” comes from (1) confusion over tax rules about what is legally owed, as Secretary Geithner can attest, and (2) provisions in our tax code that incentivize tax avoidance. The IRS will hunt down the income of Americans wherever it is earned in the world (unlike most of the rest of the industrialized world), and apply some pretty hefty rates and rules on it. I hope the legislative measure Geithner refers to include a second look at our “worldwide” system of taxation.
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