Based on this tweet (assuming that it is correct and that these are additional audits per year) I did the math. I'm making the Larry Summers assumption here that there is no diminishing returns on audits. I will use the 2015 tax year again because this is the year where audits are mostly complete. I will also use "closed" returns as my n…
Based on this tweet (assuming that it is correct and that these are additional audits per year) I did the math. I'm making the Larry Summers assumption here that there is no diminishing returns on audits. I will use the 2015 tax year again because this is the year where audits are mostly complete. I will also use "closed" returns as my numerator instead of worrying about the small amount of returns in process. I'm also rounding.
No Income. From 45k (6.9% of total no income returns, nice) returns reviewed a year to 173k (24.9%) reviews a year. Average $40,000 in recommended additional tax dollars per return reviewed. Net 5.1 Billion
1-25k in reported income. From 357k (0.7%) reviews to 670k (1,2%). $4,900 a return. Net 1.5 billion.
25k - 50k. From 141k (0.4%) to 289k (0.8%). $5,400 a return. Net .8 Billion
50k-75. From 108k (0.5%) to 231k (1.1%). $4,400 a return. Net .55 Billion
75k-100k. From 64k (0.5%) to 184k (1.4%). $5,200 a return. Net .66 Billion
100k-200k. From 92k (0.5%) to 253k (1.3%). $6,900 a return (nice). Net 1.1 Billion
200k-500k. From 31k (0.6%) to 191k (3.3%). $14,000 a return. Net 2.2 Billion
500k-1mil. From 10k (1.1%) to 52k (5.2%). $25,000 a return. Net 1 Billion.
1mil-5mil. From 9.7k (2.4%) to 52k (11.4%). $53,000 per return. Net 2.2 Billion
5mil to 10 mil. From 1.2k (4.5%) to 6.4k (19.0%). $99,000 per return. Net .5 Billion
10mil+. From 1.4k (8.5%) to 5.7k (27%). $199,000 per return. Net .85 Billion
Total Net 16.7 Billion.
It's unclear to me what the time period is over which the IRS is receiving an extra 80 Billion. But with these assumptions, which are probably generous, it would have to be over a little under 5 years to pay for itself. If it is over 10 years, the total net tax revenues after accounting for the 80 billion would be 87 Billion. There would be a ~4 year lag period because that's how long it takes for the IRS to get mostly done with the audits. If these assumptions held (absolutely zero diminishing returns), the IRS estimate on net receipts is about 37 Billion too high. And Larry Summers is in la-la land thinking that this is 124 Billion is a gross underestimate.
Based on this tweet (assuming that it is correct and that these are additional audits per year) I did the math. I'm making the Larry Summers assumption here that there is no diminishing returns on audits. I will use the 2015 tax year again because this is the year where audits are mostly complete. I will also use "closed" returns as my numerator instead of worrying about the small amount of returns in process. I'm also rounding.
https://twitter.com/JacquiHeinrich/status/1555700945928929280?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
No Income. From 45k (6.9% of total no income returns, nice) returns reviewed a year to 173k (24.9%) reviews a year. Average $40,000 in recommended additional tax dollars per return reviewed. Net 5.1 Billion
1-25k in reported income. From 357k (0.7%) reviews to 670k (1,2%). $4,900 a return. Net 1.5 billion.
25k - 50k. From 141k (0.4%) to 289k (0.8%). $5,400 a return. Net .8 Billion
50k-75. From 108k (0.5%) to 231k (1.1%). $4,400 a return. Net .55 Billion
75k-100k. From 64k (0.5%) to 184k (1.4%). $5,200 a return. Net .66 Billion
100k-200k. From 92k (0.5%) to 253k (1.3%). $6,900 a return (nice). Net 1.1 Billion
200k-500k. From 31k (0.6%) to 191k (3.3%). $14,000 a return. Net 2.2 Billion
500k-1mil. From 10k (1.1%) to 52k (5.2%). $25,000 a return. Net 1 Billion.
1mil-5mil. From 9.7k (2.4%) to 52k (11.4%). $53,000 per return. Net 2.2 Billion
5mil to 10 mil. From 1.2k (4.5%) to 6.4k (19.0%). $99,000 per return. Net .5 Billion
10mil+. From 1.4k (8.5%) to 5.7k (27%). $199,000 per return. Net .85 Billion
Total Net 16.7 Billion.
It's unclear to me what the time period is over which the IRS is receiving an extra 80 Billion. But with these assumptions, which are probably generous, it would have to be over a little under 5 years to pay for itself. If it is over 10 years, the total net tax revenues after accounting for the 80 billion would be 87 Billion. There would be a ~4 year lag period because that's how long it takes for the IRS to get mostly done with the audits. If these assumptions held (absolutely zero diminishing returns), the IRS estimate on net receipts is about 37 Billion too high. And Larry Summers is in la-la land thinking that this is 124 Billion is a gross underestimate.
Fin.