I am observing and evaluating, not speculating upon, your tenuous mooring to reality. For example, let us observe and evaluate the following:
I presented facts that support the large scale hiding of vast sums in foreign accounts, which includes clear evidence of a massive market demand for foreign banks willing to conceal the account information from account holders home countries, (and putting revealers in prison under law), massive withdrawals of many billions the moment there is serious talk about reductions in such tax-fraud enabling secrecy (around 30% of deposits in Swiss banks), the rise of such services in other countries (like Singapore) when Swiss banks reduced their secrecy laws, and the extensive efforts the US is going to close off those avenues of tax evasion. All these facts and more are only parsimoniously explained by their being extensive use of foreign accounts involving very large sums to hide income from home governments, an explanation which a priori to these facts is already beyond extremely plausible and highly likely given basic facts of human behavior and what is known about the unethical extent to many of the wealthy Americans will go to increase their wealth.
No, you mostly provided your dabblings in yellow journalism with lurid and subjective characterizations - most of them irrelevant to the CBO analysis. Apparently you think that analytically worthy facts are in a supermarket check stand tabloid, wailing over "large scale hiding of vast sums in foreign accounts", "massive market demand for concealment", "massive withdrawals", yada yada.
You can grandstand with adjective phrases such as "vast" "large scale", or "super-duper gigantic triple sized Mega sums in foreign accounts" to reassure yourself, but it does not provide a grain of actual proof that these vague "billions" of tax owing assets, real or imagined, have a material affect on the CBO statistical findings.
max, do you think the wealthy report all of their income to the IRS every year?
As a general rule of thumb people who deal in cash underreport, people who don't can't.
If your income is subject to W-2's, 1099's and K-1's the IRS knows you made it.
Yes, any income you got that was actually reported to the IRS is known to the IRS. IOW, especially middle to lower class wage earners with no power to "cook the books" in their favor and decide what is or isn't reported. There are plenty of ways the rich use their positions and power to determine what of their income is reported to the IRS. Not only do the rich under-report income, the lie about "loses".
BTW, here is an IRS study showing that wealthier people are more likely to lie on their tax returns and to under-report a much larger % of their true income. Low to mid class wage earners only under-report 5%-7% of their true income, while those making over $100k unreport 21% of their income, and business owners under-report 43%-57% of their income. The IRS researchers also noted the very wealthy have means (including Swiss accounts) of hiding income that other people do not, so their estimated % under-reporting is likely to be even greater than what the IRS could demonstrate with methods available to them. Note the source of the article is not a lefty rag but a generally conservative rag read mostly by upper income brackets.
So just how many posts are we gonna waste debating the undeniable fact that rich people lie and lie big about their incomes and loses and thus pay a notably lower % of their true income in taxes than their tax returns imply?
As many times as is necessary to for you to understand that you were not making an argument over methodology, nor even offering us a hypothesis regarding an event. You were making a mock hypothesis, rushing to provide us a conjecture on the causes of an event not even proven to exist, i.e.; that these CBO "worthless" conclusions must exist because you have a conjecture on how that could happen. Its rather like telling us that Pink Elephants must exist because you have a conjecture how they might have evolved from grey elephants.
The CBO methods of analysis, and the IRS income tax sampling of 300,000 tax returns (supplemented by the Census database) are the most direct method of measuring taxable income and determining nominal (and actual) tax rates - short of auditing all 300,000. The IRS is well aware that there is some unknown tax avoidance and/or under-reporting, but to my knowledge no one in the literature has evaluated IRS statistical tabulations and found them so corrupted by under-reporting as to be worthless for comparative purposes. And no matter how many tangential numbers you find, until someone actually does some serious analysis it is mostly your pointless speculation.
To underscore - there is no way to take the following 'facts' you allege, and make any serious inference in regards to the CBO study. For example, the article you quoted, according to the slide show it found that:
Those those making over 2 million a year under report by 11 percent
Those making 1 to 2 million under report 16 percent.
Those making 500K to 1M under report 21 percent
Those making 200K to 500K under-report 20 percent.
Those making 100k to 200K under-report 13 percent
Those making 50K to 100K under report 8 percent
Those making 30K to 50K under report 7 percent
Those making 25K to 30K under report 6 percent
Those making 15K to 25K under report 5 percent
You can't easily transfer these 9 ranges of income under reporting in individual returns into the five quintile 'averages' for households because we don't know the number of tax payers in each range, nor do we know what is the 'effective CBO tax rate' for each of the the nine ranges. But one can illustrate that the under reporting effect on a CBO progressive "effective rate" is not significant enough to warrant any inferential nonsense claims about "flattening out" or "reverseing".
Suppose, for example, that the 1 percent group (1.5 million or more) has the same effective rate as the CBO's average top quintile marginal rate of .29. For a IRS reported 1.5 million the tax it is $435K in net federal taxes (at the 29 percent CBO rate). But according to the study the REAL income is 16 percent higher at 1.74 million. So 435K paid/Real Income is recomputed down to 25 percent.
Does that modification reduce progressiveness? Yes, but not by much. Rather than a net difference of 29 percent vs a mid-quintile rate of 12 percent, the recomputed differences are 25 to 11 percent (which is also recomputed downward to account for a 7 percent under counting in the mid group). The net difference drops from 17 points to 14 points.
Hence, whether the top quintile effective rate is 25, 29 or (now in 2013) 33 percent, from the evidence you have provided (especially given that for incomes above one million under-reporting steeply declines by half) there is no support your belief that the CBO comparisons are significantly undermined. The top 20 percent do pay at least two and a quarter, and perhaps up to two and half times the rate of the mid 20 percent.
And yes, less than half the country pays for the other half.
