Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Treasury Secretary Janet Yellen meets President Joe Biden in the Oval Office of the White House in Washington, D.C. on January 29, 2021.

Treasury Secretary Janet Yellen meets President Joe Biden in the Oval Office of the White House in Washington, D.C. on January 29, 2021. (Photo: Nicholas Kamm/AFP via Getty Images)

Growing Calls to 'Audit the Ultra-Rich' as Yellen Says Tax Dodging Could Cost US $7 Trillion Over 10 Years

"Imagine what we could do for people with $7 trillion. That's infrastructure, child care, paid leave, free college, climate action, and other investments in our communities."

Treasury Secretary Janet Yellen said Tuesday that tax dodging could cost the federal government around $7 trillion in revenue over a decade, an estimate that comes as progressive lawmakers and President Joe Biden are calling for increased IRS funding to crack down on wealthy tax cheats.

During an event hosted by The Atlantic, Yellen called the $7 trillion gap between what the federal government is collecting and what is owed under the current tax code "really shocking and distressing." Yellen's estimate resembles the conclusion a 2019 paper (pdf) that found, "Between 2020 and 2029, the IRS will fail to collect nearly $7.5 trillion of taxes it is due."

"We can start closing this gap next week. Pass my Stop CHEATERS Act and audit the ultra-rich."
—Rep. Ro Khanna

"We're trying to make meaningful steps to close that gap," said Yellen.

As part of his recently unveiled $1.8 trillion American Families Plan, Biden proposed boosting IRS funding by $80 billion over the next decade to bolster enforcement efforts following years of Republican-led budget cuts that have left the agency without adequate resources and staffing to audit the wealthiest Americans. The White House believes the new IRS funding would increase federal revenue by a net $700 billion over 10 years.

According to a study released in March by IRS researchers and academics, the richest 1% of U.S. households don't report around 21% of their income and account for roughly 36% of all unpaid federal income tax.

"From a policy perspective, our results highlight that there is substantial evasion at the top which requires administrative resources to detect and deter," the study's authors wrote.

Progressive members of Congress seized upon Yellen's comments as further evidence for the need to confront tax avoidance by the rich in addition to implementing a wealth tax and other measures to rein in out-of-control inequality.

"We can start closing this gap next week. Pass my Stop CHEATERS Act and audit the ultra-rich," tweeted Rep. Ro Khanna (D-Calif.), referring to his bill that calls for $100 billion in additional funding for the IRS and stricter reporting requirements to stem tax dodging by the rich and large corporations.

"Imagine what we could do for people with $7 trillion," added Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus. "That's infrastructure, child care, paid leave, free college, climate action, and other investments in our communities."

As the Brookings Institution noted earlier this year, canceling all federal student loan debt would cost around $1.6 trillion, while forgiving up to $50,000 per borrower—an idea proposed by Sen. Elizabeth Warren (D-Mass.), Senate Majority Leader Chuck Schumer (D-N.Y.), and other Democratic lawmakers—would cost about $1 trillion. Making public colleges and universities tuition-free would cost $800 billion over ten years.


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
We need your help.

Support progressive journalism.

Common Dreams is not your average news site. We don't survive on clicks or advertising dollars. We rely entirely on your support. And without it, our independent progressive journalism simply wouldn’t exist. Every gift of every amount matters.

Join the fight and support our common dreams today.

Frontline Foe of Formosa Plastics Plant in 'Cancer Alley' Among 2021 Winners of 'Green Nobels'

Sharon Lavigne, the North American recipient of the Goldman Environmental Prize, is being recognized for stopping construction of a plastics manufacturing plant in her Louisiana community.

Andrea Germanos, staff writer ·


Press Freedom Advocates Say 'Congress Needs to Act' to Prevent More DOJ Spying Abuses—Under Both Parties

"Many people already forget that before Trump was known as enemy number one of press freedom, Barack Obama's Justice Department did more damage to reporters' rights than any administration since Nixon."

Jake Johnson, staff writer ·


Rev. Barber Says West Virginians Are Ready for 'Non-Violent Sit-Ins' Against Manchin for Abetting GOP Voter Suppression

"This is a moral issue, a constitutional issue, and we're gonna stand and fight against it—even if we gotta go to jail."

Jake Johnson, staff writer ·


'Sorely Disappointed' by Court Ruling, Pipeline Foes Demand Biden 'Act Immediately to Stop Line 3'

"Every day President Biden refuses to stop the Line 3 pipeline is a slap in the face to environmental justice communities and a renewed breaking of his promises on climate and Indigenous rights."

Brett Wilkins, staff writer ·


300+ Progressive Groups Urge Corporations to Ditch ALEC for Pushing Voter Suppression Bills

"If corporations really believe in protecting our democracy and the right to vote, they must end their affiliation with ALEC," said one advocate.

Kenny Stancil, staff writer ·