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Illustration: Aïda Amer/Axios

President Biden wants $80 billion over 10 years for the IRS to be able to close the gap between taxes owed and taxes paid — a gap that IRS commissioner Charles Rettig estimates could be as much as $1 trillion per year.

What they're saying: "We do get out-gunned," Rettig told the Senate Finance Committee earlier this month.

By the numbers: The number of IRS enforcement employees has fallen by 17,436 since 2010, even as opportunities for tax evasion have multiplied, especially in the world of cryptocurrency.

  • A major paper by Gabriel Zucman and others at NBER finds that more than 20% of the income of the top 1% goes unreported — and that a lot of tax evasion goes undetected even when an audit takes place.

What they found: Researchers studied 513 taxpayers who voluntarily revealed the existence of offshore accounts to the IRS during an amnesty period between 2009 and 2015, and who had also previously been audited by the IRS.

  • Only 7% of the audits had managed to uncover any offshore wealth.

The bottom line: Biden hopes that the $80 billion investment will reap some $700 billion in extra owed taxes over 10 years. Even if it does, that's likely only a small fraction of the total amount that the top 1% are evading.

Go deeper: Biden committed to capital gains tax hike for rich

Go deeper

Updated Apr 28, 2021 - Politics & Policy

Biden's latest $1 trillion+ plan

Photo: Drew Angerer / Getty Images

President Biden on Wednesday will present his third $1 trillion+ package to Congress since taking office, asking for $1.8 trillion in new spending to expand the American education system, provide more help for childcare and create millions more jobs.

The big picture: Biden is also proposing a series of tax hikes on the rich, which his administration vows will not hit Americans who make less than $400,000 and households with less than $1 million in capital gains.

Apr 29, 2021 - Politics & Policy

Exclusive: Biden's $400,000 tax cap for individual earnings, not joint filers

Photo: Bloomberg / Getty Images

President Biden's promise not to raise taxes on Americans who make less than $400,000 only applies to individuals — not married couples filing jointly, a White House official clarified to Axios on Wednesday.

Why it matters: The declaration means a hypothetical couple, with each spouse making $399,999, would not escape the tax increase even though they individually earn less than $400,000.

Scoop: Biden plans to ask Congress to pay for $1.8 trillion in new spending

President Biden speaks about updated CDC mask guidance from the North Lawn of the White House on Tuesday. Photo: Drew Angerer/Getty Images

President Biden plans to ask Congress to pay for the entirety of the $1.8 trillion in new spending on health care, child care and education he’ll unveil on Wednesday night, people familiar with the matter tell Axios.

Why it matters: Biden’s decision to fully offset both the $2.25 trillion American Jobs Plan he announced last month, and the $1.8 trillion American Families Plan being rolled out in his joint address, all but guarantee big political battles on both the spending and tax sides of the combined $4 trillion proposal.