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tax havens
Trump and Musk Are Making It Harder for the IRS to Catch Wealthy Tax Cheats
Musk and Trump claim to be sage businessmen, but it would be hard to find a business owner in America that would dismantle their accounts receivable department when their wealthiest clients still owe them money.
Mar 29, 2025
The Trump administration and Elon Musk’s DOGE have begun dismantling the Internal Revenue Service, or IRS, beginning with 6,700 layoffs. Their stated plan is to cut half of the agency’s workforce.
Their biggest cuts appear to be in the Large Business and International division, which audits wealthy individuals and companies with more than $10 million in assets. These are essentially the workers that make sure billionaires and corporations pay their taxes.
Musk and President Donald Trump claim to be sage businessmen, but it would be hard to find a business owner in America that would dismantle their accounts receivable department when their wealthiest clients still owe them money.
The real beneficiaries of a weak IRS are billionaires and large global corporations.
So make no mistake: These cuts will cost taxpayers a lot more than they save.
Gutting the IRS will hurt the middle class by reducing the taxes billionaires and corporations pay for our public services. It passes the bill to working class taxpayers to cover veteran’s services, infrastructure, national parks, and defense.
When it comes to taxes, the wealthy aren’t like you or me. Most wage earners have our state and federal taxes withheld from our monthly paychecks. Ninety percent of taxpayers use the simple standard deduction filing and hope we get a refund.
But billionaires and multimillionaires are different. Their income comes mostly from investments and assets—which they can hide. They hire experts from the “wealth defense industry”—an armada of tax lawyers, accountants, and wealth managers—to minimize their taxes and maximize inheritances for their fortunate children.
They deploy anonymous shell companies, complex trusts, and bank accounts in tax havens like Bermuda, Cayman Islands, and South Dakota to aid their clients in minimizing taxes—tools not available to ordinary taxpayers. According to the Tax Justice Network, over $21 trillion is now hidden in tax havens like these.
A 2021 exposé by ProPublica found that more than half of the 100 wealthiest U.S. billionaires use a complex trust system to avoid estate taxes, which at the current level only kicks in for people with wealth over $13.99 million.
This aggressive tax dodging by the superrich has resulted in an enormous “tax gap” between what they owe and what’s collected. For the last few years, this gap is estimated at $700 billion a year—almost the size of the Pentagon budget.
Working and middle class taxpayers will pick up the slack, or see their services cut. Most likely some of this gap will be added to the $36 trillion national debt, requiring us to pay on an installment plan.
In previous decades, the IRS had the expertise to keep up with the schemes that billionaires and transnational corporations use to dodge their taxes. But over the last two decades, their capacity to catch wealthy crooks and grifters has been decimated by cuts.
Things started to turn around again in 2021, when Congress voted to invest in enforcement. And already, the investment was starting to pay off. A year ago, the IRS announced they’d recovered $482 million from millionaires who hadn’t paid their debts.
Trump and Musk are now reversing these modest gains.
As the agency people love to hate, the IRS was an easy target for Trump’s anti-government attacks. But the real beneficiaries of a weak IRS are billionaires and large global corporations. With an understaffed IRS, their tax shell games can operate without scrutiny—something seven previous IRS commissioners from both parties recently spoke out against.
We may not agree about everything in the federal budget, but most people agree the wealthy should pay their fair share of whatever expenses we share. And it’s hard to catch the criminals if you remove all the cops on the beat.
The billionaires will be popping their champagne bottles. Even with the higher tariffs on European bubbly, they can afford the best.
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‘Long-Overdue Justice’: EU Court Rules Ireland Let Apple Avoid $14.4 Billion in Taxes
"This ruling exposes E.U. tax havens' love affair with multinationals."
Sep 10, 2024
The European Union's highest court on Tuesday ruled that Apple must pay €13 billion in back taxes to Ireland, determining that the country gave the company illegal tax benefits in the past, in what campaigners called a victory for tax justice.
The E.U. Court of Justice ruling brought to a close a landmark case that began in 2016 when the European Commission ordered Apple to pay the €13 billion ($14.4 billion) based on an unfair tax arrangement the company had with Ireland from 1991 until 2014. A lower court overturned the commission's order in 2020, but Tuesday's ruling, which is final, restores it.
Observers viewed the case as among the most important brought by E.U. Competition Commissioner Margrethe Vestager, an antitrust official who's been in office since 2014.
"It's important to show European taxpayers that once in a while, tax justice can be done," Vestager, who leaves office in two weeks, said following Tuesday's ruling.
Chiara Putaturo, a tax policy adviser at Oxfam EU, said in a statement that "this ruling exposes E.U. tax havens' love affair with multinationals. It delivers long-overdue justice after over a decade of Ireland standing by and allowing Apple to dodge taxes."
Today is a huge win for European citizens and tax justice.
👉In its final judgment, @EUCourtPress confirms @EU_Commission 2016 decision: Ireland granted illegal aid to @Apple.
Ireland now has to release up to 13 billion euros of unpaid taxes.
— Margrethe Vestager (@vestager) September 10, 2024
The European Commission argued that the selective tax benefits that Ireland had offered to two Apple subsidiaries amounted to illegal state aid that hindered competition. The company's tax burden in Ireland, where its European operations have been based since 1980, was as low as 0.005% of its profits in 2014.
In November of last year, Giovanni Pitruzzella, the advocate general of the E.U. Court of Justice, issued an opinion in favor of the commission's position and against the lower court ruling, in a setback for the tech giant. The high court, which is based in Luxembourg, generally agrees with its advocate general following such recommendations, as it ultimately did on Tuesday.
The €13 billion, plus interest, has been held in an escrow account since 2018 and will be released to Ireland, even though the country fought against the commission's order. Ireland said it would respect the court ruling.
Ireland is often characterized a tax haven within the E.U. and hosts the European headquarters for many multinational firms, with critics charging that its tax system drives up inequality.
Tax justice campaigners said Tuesday's ruling should just be a start and that more fundamental reforms are needed at the international and E.U. level.
"Our tax problem is more than just one rotten apple," Tove Maria Ryding, a policy manager at the European Network on Debt and Development, said in a statement.
"The international system for taxing multinational corporations continues to be deeply complex, unpredictable and unfair," she added, arguing that a company's economic activity across many countries, including in the Global South, shouldn't mean tax revenues only for one country such as Ireland.
Ryding praised the United Nations' efforts to establish a global tax convention, calling the proposal a "beacon of hope for a fairer future."
Putaturo of Oxfam likewise called for a fairer tax system in Europe.
"While this ruling will force the tech giant to pay its debt, the root of the issue is far from solved," she said. "E.U. tax havens can still make sweetheart tax deals with big multinationals. The duty to stop this rests on the shoulders of E.U. policymakers. Yet, they have turned a blind eye to tax havens within their borders and the harmful race to the bottom that countries like Ireland are instigating."
Oxfam EU also called for the closing of tax loopholes and the establishment of a wealth tax.
The Apple case was not the only victory for Vestager, the antitrust chief, on Tuesday: The E.U. Court of Justice also ruled that Google had illegally used its search engine dominance to favor its own shopping service, fining the company €2.4 billion ($2.65 billion).
Bloomberg on Tuesday called it a "double boost to the European Union’s crackdown on Big Tech," and said that Vestager's past work had "paved the way" for the U.S. and the U.K. to take action against Google.
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Sanders, Schakowsky Introduce Corporate Tax Dodging Prevention Act
"American workers should not be paying more in federal income taxes, in a given year, than profitable companies like Target, Amazon, and T-Mobile," said the senator.
Apr 10, 2024
U.S. Sen. Bernie Sanders and Congresswoman Jan Schakowsky on Wednesday introduced a bill that aims to close tax loopholes for corporations, end tax breaks for businesses that move jobs abroad, and stop companies from hiding profits in tax havens.
"At a time of massive wealth and income inequality and soaring corporate profits, it is an outrage that many large, profitable corporations continue to pay little to nothing in federal income taxes," Sanders (I-Vt.) said in a statement. "As working people struggle to pay rent and put food on the table, we have a corrupt and rigged tax code that is designed to benefit the wealthy and the powerful at the expense of working families."
"Meanwhile, Republicans would make a bad situation even worse by providing even more tax breaks to their corporate campaign contributors and the billionaire class while proposing massive cuts to Social Security, Medicare, and Medicaid," he noted, nodding to GOP budget plans for fiscal year 2025, which begins in October.
"That is unacceptable. We need to create an economy and a government that works for all of us, not just the top 1%," Sanders asserted. "And, one of the ways we can begin to do that is by making sure that large corporations pay their fair share of taxes. American workers should not be paying more in federal income taxes, in a given year, than profitable companies like Target, Amazon, and T-Mobile."
"We need to create an economy and a government that works for all of us, not just the top 1%."
The Corporate Tax Dodging Prevention Act, unveiled as Americans prepare for the federal income tax deadline on Monday, could raise over $1 trillion in revenue over a decade with the tax haven provision alone, according to the Joint Committee on Taxation.
"Thanks to President Joe Biden, we are growing the economy from the bottom up and the middle out, but we must go even further by passing the Corporate Tax Dodging Prevention Act to help put the interests of everyday Americans ahead of billionaires and transnational corporations," said Schakowsky. "I thank Sen. Sanders for devoting his career to tackling income inequality and am proud to partner with him on this important measure."
Biden's budget blueprint for the next fiscal year, released last month, includes proposals to hike taxes for corporations and ultrarich individuals—whose wealth is soaring to record heights. Such policies are not expected to pass the divided Congress, but they serve as a clear statement of the Democratic president's position just months away from the November election.
When then-President Donald Trump—now the presumptive Republican nominee to face Biden—signed the Tax Cuts and Jobs Act in December 2017, he infamously declared that "corporations are literally going wild over this, I think even beyond my expectations."
Many of that law's cuts are set to expire at the end of next year. During an exclusive Florida fundraiser at the home of a billionaire investor over the weekend, the former president urged his supporters to help him "turn our country around" by taking steps including "extending the Trump tax cuts."
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