Skip to main content

When Trump took up leadership in America, a giant country which is known globally as a result of a booming economy, his administration promised to support workers and even take the economy to even greater heights. However, after a few years of leadership, America`s middle class and the poor tend to be at the receiving end of the current leadership style. Trump’s policies have elevated the class of wealthiest in the country further impoverishing the rest of the population. Heidi Shierholz a policy director and a senior economist pointed out this fact. It’s true that the economy of the United States is growing but only those at the top are enjoying the fruits.

Intensified Scrutiny by IRS

Why Inequality In America Is At Its Peak

On many occasions, Trump has talked about his administration working on inequality. Contrary to his words, the United States Census Bureau Data confirms that the country is facing the highest level of inequality in history. For instance, IRS’s chance to audit the wealth has crumbled. The only class of people left at the mercy of the IRS recently is the poor taxpayers. As a result, it makes for them even harder to claim credits that they are entitled to. Most of these targeted poor taxpayers cannot afford the services of an IRS audit lawyer therefore having no one to protect their assets and businesses.

Shockingly, IRS that has run short of funds after facing budget cuts consecutively has lost many agents as most of them are retiring.

Shockingly, IRS that has run short of funds after facing budget cuts consecutively has lost many agents as most of them are retiring. To the wealthy class, such a move is a goldmine. Things are working out in their favor day in day out. In fact, recently released data proved that in the last year about 80% of the wealthy people rarely face a tax audit unlike in the past years.

However, poor American taxpayers have continued to carry the burden of the IRS. For instance, last year, key anti-poverty programs in the country consisting of citizens receiving the earned income tax were reported to be audited often. On the contrary, the wealthiest taxpayers are not even audited or rather are audited at a very low rate. The trend is still the same to date.

Poor versus rich audit

In the United States under the current leadership, audits of the low class are quite steady but that of the rich has continued to drop. The worst part is that the audit rates of both classes are now almost the same. For instance, in 2018 the superior 1% class of taxpayers' audit rate was 1.56% while the rate of the poor earning an annual income of less than $20,000 was 1.41%. This includes the EITC recipients.

Scroll to Continue

Recommended Articles

The main reason why the EITC recipients audit is steady is that they are easy to conduct. Most of them are automated meaning they got fewer complications. This leaves space for the wealthy to cheat as the poor face tough investigation by the IRS in the name of being easy to audit. Ranking member in the Senate Finance committee Sen. Ron Wyden, D-Ore, pointed out that auditing low-income taxpayers, only a letter is needed wherein the case of rich taxpayers a group of lawyers and investigators are needed.

He further added that the United States has a double tax system and IRS has proved that by giving a blind eye to the wealthy taxpayers and putting high penalties on workers who are making very low income.

What IRS officials have to say on the subject? 

In fact, Dean Patterson an IRS spokesman confirmed the high-pitched drop in the wealthy tax-payers audit. His reasons were the loss of skilled and professional auditors. He agreed to the fact that conducting an audit for the poor is easier and less demanding.

A recent study conducted by government and academic researchers revealed shocking costs related to these audits. In fact, several people and families belonging to the lower class fear to claim credit which they are qualified for.

All in all, these audits rarely have a happy ending. New study data reveal that some end without any response from the taxpayer. This is always the case, especially with poor audit targets. That said, marginalized Americans and of course those with low incomes are left to hope against hope that the widening gap between the rich and the poor will reduce in the future.