Fire the IRS Chief Who Doesn't Care if the Rich Don't Pay

By Sion Bell and Jeff Hauser, The Daily Beast

12 June 21

Commissioner Charles Rettig’s only response to a blockbuster report about how little the richest pay was to say he’d try to prosecute the leaker.

ithin hours of ProPublica’s blockbuster report showing just how little America’s 25 wealthiest people pay in taxes, IRS Commissioner Charles Rettig announced an investigation, which, of course, is what great journalism into a scandal is supposed to generate: a renewed commitment by senior government officials to fix an obvious scandal.

But Rettig wasn’t looking into how broken the tax system is in favor of the wealthy, but rather about who leaked the documents proving that to the press, stating that he intended to prosecute the whistleblower if the investigation found the records were distributed illegally. While the data leak does present security concerns for the IRS—an agency which has been much more successful at protecting the sensitive financial information of millions than banks or Silicon Valley—the bigger issue here is the significant failures of the IRS and our tax administration at large in ensuring the fair application of the tax code.

A commissioner who prioritizes the justness of the system would see the report as a prompt for self-reflection rather than immediately trying to redirect blame on a whistleblower who released information relevant to the public interest. That’s the latest reason we believe that Joe Biden should replace Rettig—who was appointed by Donald Trump to shield his personal tax returns—and install someone committed passionately to making tax collection functional again.

This isn’t the first time Commissioner Rettig has shown his allegiance to protecting the interests of the wealthy over the public interest. Prior to becoming commissioner, Rettig worked at a boutique Beverly Hills law firm for three decades, where he specialized in shielding wealthy taxpayers from IRS audits. In 2010, when the IRS announced the creation of a task force focused on auditing the very wealthy, Rettig publicly denounced the task force’s work as “audits from hell,” a particularly troubling pronouncement from someone now in charge of said audits.

With the newly released ProPublica data, however, Rettig’s comment takes on a particularly absurd tone. We now know that in 2011, the year after the creation of the task force, Jeff Bezos reported so little in taxes that he was able to claim a $4,000 child tax credit. And Bezos wasn’t a unique case; Elon Musk, Michael Bloomberg, Carl Icahn, and George Soros all paid zero income tax in at least one year covered by the ProPublica report. Suddenly, Trump’s $750 tax bill in 2016 and 2017 no longer looks so paltry.

ProPublica characterized the billionaires’ low income tax payments as a result of tax avoidance, the legal usage of financial planning and loopholes to reduce tax liability. But there are plenty of reasons to be skeptical of the deductions these billionaires took that allowed them to claim zero income and therefore pay zero income tax—a prospect which would more properly point to illegal tax evasion. The wealthy regularly use secretive and complicated business arrangements to shield income from IRS scrutiny while using other, harder-to-parse activities, like donations of property, to reduce their taxable income even further. According to a recent study on the tax gap, the top 1 percent of income earners on average do not report 20 percent of their incomes, particularly pass-through business income and wealth stored in offshore accounts.

But IRS energies in recent years have focused primarily on the lowest income earners, particularly claimants of the Earned Income Tax Credit (EITC), a tax program designed to assist poor workers, particularly those children. The program has long been besmirched as riddled with fraudulent claims, and the IRS has obligingly allocated its resources towards auditing EITC claimants, sometimes targeting honest, vulnerable taxpayers in the process. EITC overpayments make up only about 4 percent of the tax gap even when using the most aggressive estimates. On the other hand, unreported business income accounts for a full 27 percent, and this is likely an underestimate given IRS shortcomings with detecting pass-through income. Despite this, with significantly declining resources, the IRS has more quickly scaled down its audits on the wealthy and large corporations than its audits on poor EITC claimants, even though audits on the rich yield more revenue per audit hour than, unsurprisingly, inquisitions into the working poor.

ProPublica’s reporting confirms what many have suspected for a while: that our tax system and our tax administration are thoroughly and inequitably broken. ProPublica’s source remains unknown, and the outlet expressed some concerns that it could be a foreign government adversary, but with no signs of a hack, the most likely explanation currently points to an IRS employee concerned by the agency’s inability or unwillingness to properly oversee the fair application of the tax code.

With even aggregate tax data slow to be released, the tax filing data revealed is of crucial importance, shedding light on the precise ways the wealthiest shelter their wealth. And, though some of the billionaires whose tax information was disclosed decried the release as a criminal invasion of privacy, it’s unclear what harms come from the release. Indeed, as ProPublica noted in its defense of its reporting, numerous Nordic nations like Sweden, Norway, and Finland regularly make public the tax returns of all citizens with no significant deterioration of privacy.

Commissioner Rettig could have viewed this reporting as a wake-up call and a moment for introspection on how the agency he leads can do better, will do better. Instead, he immediately cast his gaze outward, expressing concern over the violation of billionaires’ right to privacy (which, in this case, means their right to evade scrutiny on their manipulation of the tax system) and declaring his intentions to prosecute. Rettig still has not commented on the substance of the ProPublica reports and what he intends to do to remedy such blatant tax injustice.

Rettig’s interests clearly lie with the wealthy and protecting their privacy over all else. The action that likely tipped the scales in Rettig’s favor when Trump needed to replace former IRS Commissioner John Koskinen was Rettig’s defense of Trump for not releasing his tax returns during the 2016 election. With Democrats intending to use their congressional authority to compel the release of said tax returns, Rettig was the perfect shield, one with both a professed support for Trump’s refusal and experience in fending off tax scrutiny.

President Biden should see Rettig for who he is: a Trump appointee installed to protect the interests of the wealthy, including but not limited to Trump himself, above all else. By immediately forefronting the tenuous and suspect privacy concerns of billionaires, Rettig’s response to the ProPublica reporting is just the latest display of his fundamental allegiance. If Biden is truly committed to reforming our tax system by finally making the wealthy pay their fair share, he will exercise his clear legal authority and replace Rettig at the helm of the IRS.

Ilhan Omar Is Once Again Being Attacked by Her Own Party for Speaking Out

By Arwa Mahdawi, Guardian UK

12 June 21

Democratic leadership chimed in to rebuke the progressive congresswoman for what was clearly a mischaracterization of her comments

he Bad Faith Brigade come for Ilhan Omar yet again

Here are the rules, OK? The United States is the greatest, most moral country to ever exist. It brings democracy to all the poor savages in the rest of the world, who are incapable of knowing what’s good for them. It doesn’t commit war crimes, there’s just some occasional collateral damage amid all that democracy-building. Its allies are morally righteous, its enemies are entirely evil. Do not question any of that, do not query American exceptionalism, and you will have a very fruitful career in US politics or cable news.

Ilhan Omar, alas, seems to have a hard time remembering these rules. The progressive Democratic congresswoman is once again being censured by her own party for what appears to be the crime of being an outspoken black Muslim woman. Nobody getting publicly outraged by Omar appears to have any interest in annoying things like context, but here’s the context for the latest manufactured controversy.

On Monday, during a hearing by the House foreign affairs committee, Omar asked the secretary of state, Antony Blinken, a question about America’s stance toward the international criminal court (ICC) at the Hague. Omar noted that the US had opposed ICC investigations into potential crimes committed in Palestine and Afghanistan and asked how victims of war crimes are supposed go for justice if domestic courts won’t pursue justice. Blinken replied with an evasive answer, saying the US and Israel “both have the mechanisms to make sure that there is accountability in any situations where there are concerns about the use of force and human rights”. Understandably unsatisfied with this, Omar later tweeted a video of the exchange, saying: “We must have the same level of accountability and justice for all victims of crimes against humanity. We have seen unthinkable atrocities committed by the U.S., Hamas, Israel, Afghanistan, and the Taliban. I asked @SecBlinken where people are supposed to go for justice.”

Promoting accountability and justice shouldn’t be controversial. But anytime Omar opens her mouth, rightwingers – most of whom probably think the ICC is a cable channel – rush to deliberately misinterpret her words. Omar was immediately accused of antisemitism and promoting false equivalencies by the right. And, as per usual she was accused of being an ungrateful immigrant. The delightful Tom Cotton chimed in to not-so-subtly suggest that the Omar should go back to where she came from. “@Ilhan was a refugee from Somalia and America welcomed her,” Cotton tweeted. “If she really believes America is a hateful country on par with the Taliban and Hamas, she’s welcome to leave.”

You expect bad faith attacks from the right. That’s what they do. Omar could say “I like roses” and the right would find a way to accuse her of promoting communism and hating America. But Democrats should know – and do – better. They should be in the business of protecting their colleagues from bad faith attacks. Instead the highest levels of Democratic leadership chimed in to rebuke Omar for what was clearly a mischaracterization of her comments.

The “Squad” are constantly described as divisive and accused of sparking in-fighting among the Democrats. But what’s more divisive than helping to incite hatred towards a colleague? If Democrats had a problem with Omar’s wording they could have talked to her in private. But, as she noted on Twitter, they didn’t. They chose to add fuel to bad faith Republican attacks and incite violence towards a congresswoman who is already a prominent target for abuse. “Pretty sick & tired of the constant vilification, intentional mischaracterization, and public targeting of @IlhanMN coming from our caucus,” Alexandria Ocasio-Cortez tweeted. “They have no concept for the danger they put her in by skipping private conversations & leaping to fueling targeted news cycles around her.”

I’m sick and tired of it too. This latest episode is about more than Omar’s thoughts on the ICC – it’s about Diversity™ more generally. Democrats seem to love “diversity” when it’s just diverse faces around a table. They’re not so keen on diverse voices, however. There’s this implication that if you’re a minority you should just shut up and be grateful for being given a seat at the table. You shouldn’t ask difficult policy questions. You shouldn’t suggest America isn’t the most benevolent place on earth. You should toe the line and be grateful.

What I admire about the Squad is that they are very vocal about their refusal to be used as tokens. In a 2019 speech at the Netroots Nation conference, Ayanna Pressley – who has defended Omar from this latest attack – said she wasn’t interested in bringing “a chair to an old table”. It’s time to shake that table, she said: “We don’t need any more black faces that don’t want to be a black voice.” What she was saying, her spokeswoman later stressed, was that “diversity at the table doesn’t matter if there’s not real diversity in policy”. By suggesting that the US actually be held accountable for its actions, Omar is pushing for real diversity in policy. It’s depressing her colleagues would rather wage bad faith personal attacks than engage with that.

Sexual harassment has become ‘normalised’ in schools

A depressing review of schools and colleges in England has found almost 80% of girls say sexual assault happens a lot or sometimes between people their age. Sexual harassment and online sexual abuse have become routine that some schoolchildren don’t even bother challenging or reporting it anymore.

Australian swimmer withdraws from Olympic trials over ‘perverts’

Maddie Groves, who won two silver medals at the Rio Games, said her decision to withdraw should be a lesson to “all misogynistic perverts in sport and their bootlickers”. The nature of Groves’s allegations aren’t entirely clear, but last November she alleged someone she worked with had made her feel “uncomfortable” and said she was body-shamed.

Record number of women in England and Wales had abortions in 2020

The increase is attributed to “early abortion at home becoming lawful” and economic uncertainty exacerbated by the pandemic.

Apple repair techs uploaded a woman’s nudes to Facebook

This isn’t the first time something like this has happened. As Vice notes, it highlights the “need for Apple to relinquish its repair monopoly and let us repair our own stuff”.

Jeffrey Toobin, notorious Zoom masturbator, back on CNN

Exposing yourself to your colleagues is fine, apparently. Engaging in activism while at university, however, gets you kicked out of a job.

The week in rodentarchy

Please enjoy this video of a Turkish jeweller who has a fierce rescue squirrel called Memocan. Little Memocan will go back to the wild after he recovers from a paw injury, but in the meantime he is guarding the jewellery shop’s cash register. Defund the police and put the spare cash towards security squirrels, I reckon.