Law for Wealthy Tax Evaders Backfires
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
WASHINGTON — A law meant to crack down on wealthy tax dodgers has instead become the most serious problem facing millions of other taxpayers.
For the government, the biggest tax problem is the billions of dollars in unpaid taxes, the National Taxpayer Advocate, Nina E. Olson, said. She reported yesterday to Congress on the hurdles Americans face in meeting their tax obligations.
Ms. Olson, who works independently within the Internal Revenue Service, also urged Congress to repeal IRS authority to contract collection activity to private agencies. She is required to submit an annual report to Congress listing at least 20 of the most serious problems encountered by taxpayers.
This year the list was topped by the alternative minimum tax, which was enacted in 1969 to close loopholes that enable the wealthy to avoid paying taxes. But because the law was not indexed for inflation, a provision that originally affected about 20,000 taxpayers now hits tens of millions.
“Today the AMT is left to punish taxpayers for engaging in such ‘classic tax-avoidance behavior’ as having children or living in a high-tax state,” the report said.
