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Economic News, Data and Analysis

Tax gap at $1 trillion!

Here is the report from BEA.
And a short Tax notes article… :

From Tax Notes:
Government Report Shows $1 Trillion Escaped Tax in 2003
by Allen Kenney
A new government report reveals that U.S. taxpayers paid no tax on more than $1 trillion of income in 2003.
Date: Dec. 21, 2005
A new government report reveals that U.S. taxpayers paid no tax on more than $1 trillion of income in 2003.
The Commerce Department study details the differences between the Bureau of Economic Analysis’s “personal income” figure and the IRS’s adjusted gross income amount — known as the “AGI gap” — in 2003, the most recent data available. While AGI consists only of taxable income, personal income also takes into account tax-exempt income and adjustments attributable to “misreporting” (underreported and unreported income). Personal income also includes income that is partially taxed, such as Social Security benefit payments. (For the report, see Doc 2005-25612 Database ‘Tax Notes Today’, View ‘(Number’ [PDF].)
Commerce determined that almost $425 billion of the $1 trillion gap could be attributed to misreporting. The remainder of the difference, roughly $620 billion, had no “easily identifiable” explanation, according to Commerce.
The 2003 figure represents a 10 percent increase over 2002’s level of $943 billion. The overall gap has grown steadily since 1999, when it was just under $700 billion.
The amount of the 2003 AGI gap represents almost 15 percent of the bureau’s total personal income figure for that year.

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Filed under: Economics

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