OPINION: Trump’s taxes expose serious flaws within the IRS

Affluent Americans like President Donald Trump frequently use as many deductibles, write-offs and tax credits as they can to hold onto their wealth, and no one is keeping them in check. SPECIAL TO THE ORACLE

The New York Times released a report on the last two decades of President Donald Trump’s tax returns on Sept. 27. The report showed that in 10 of the last 15 years, Trump paid zero income taxes. In 2016, Trump was only required to pay $750 in income taxes when his estimated net worth was $3.7 billion at the time, according to Bloomberg’s Businessweek. 

While people have condemned Trump for this clear display of tax avoidance, we must criticize the system that allows this to occur rather than those who know how to abuse it. 

Other presidents paid significantly higher income taxes during their first year in office, but the payments have varied greatly. Washington Post data reporter Christopher Ingraham reported that among the presidents from the Reagan administration in the 1980s to the Obama administration, they paid anywhere from $60,000 to almost $1.8 million. There’s no question why people are unsettled. 

The New York Times summarized some of Trump’s deductibles in his tax returns to explain how Trump was able to pay so little.

There was a $70,000 deductible on Trump’s hair stylings during his reality show “The Apprentice” and over $95,000 deducted from nine of Trump’s companies to style his daughter Ivanka Trump’s hair. From 2010-2018, $26 million was labeled as business expenses, with a $750,000 charge filed under “consulting fees” to Ivanka, according to the New York Times article. 

It’s obvious how easy it is to abuse the Internal Revenue Code (IRC). This is just the tip of the iceberg that shows how one can and will take advantage of loopholes set in place. 

The IRC has about 30 pages on raising revenue and about 6,000 pages on how to reduce taxes. The rich tend to use as many deductibles, write-offs and tax credits as they can in an effort to keep all of their earnings. The only way to stop this is to change the system.

One major issue with keeping wealthy Americans accountable is that the nation’s revenue agency doesn’t have the time nor the money to be an efficient watchdog. According to Fox Business, the Internal Revenue Service (IRS) has lost funding and auditors over the last decade which caused it to be ill-equipped to handle auditing the super-wealthy, who have assets, businesses and potential overseas banking accounts to comb through. 

The IRS auditing Trump is a perfect example of how difficult it is to audit the wealthy. Trump has been under investigation by the agency for over a decade now because he received a $72.9 million tax refund in 2011 which he claimed after reporting huge losses.

On the other hand, it’s much easier to audit lower-income families with less to check. Households earning a median annual income of $24,000 and living in poor, rural counties claiming Earned Income Tax Credit end up more likely to be audited than a millionaire, said Fox Business.

Congress has passed House bill HR 3351 that will increase the IRS’ funding by $600 million in 2021. This will increase an auditor’s ability to hold those in higher income brackets accountable while also being able to efficiently respond to taxpayers’ needs. While this is a good start, the IRS will need even more funds to really get back on track. 

With the additional funding, its budget will be over $12 billion in 2021. This will be the first time it has increased since 2010 when it had a budget of $14.5 billion. Former IRS Commissioner John A. Koskinen said in a speech for the Urban Booking Tax Policy Center in April 2015 that every $1 invested in the IRS will return $4 in revenue from unpaid taxes. So while we’re moving in the right direction, there should be more to follow. 

With little funding, more people will take advantage of the system at the expense of the lower class. Unless you are happy with the fact that you likely paid more in taxes than your president, use this chance to convince your representative to vote to increase IRS funds so it can hold all Americans accountable.