BILLIONS OF DOLLARS ARE NOT
COLLECTED SIMPLY FROM LACK OF
ENFORCEMENT.
MY NEXT GUEST IS ONE OF THE FIVE
FORMER TREASURY SECRETARIES WHO
SAYS THEY KNOW HOW TO STOP THIS
MASSIVE PROBLEM.
JACK LEW SERVED AS TREASURY
SECRETARY IN THE OBAMA
ADMINISTRATION.
SECRETARY, THANK YOU FOR JOINING
ME.
YOU SAY THERE IS A SOLUTION TO
THIS.
WHAT IS IT?
>> IT’S GOOD TO BE WITH YOU,
STEPHANIE.
YOU KNOW, THE REALITY IS THAT IF
YOU DON’T AUDIT TAXES, IF YOU
DON’T HAVE ENFORCEMENT
RESOURCES, YOU DON’T HAVE ANY
COPS ON THE BEAT.
FOR THE LAST 25 YEARS WE’VE SEEN
THAT THE AMOUNT OF RESOURCES
AVAILABLE FOR TAX ENFORCEMENT
HAS DROPPED BY 50%.
IT WAS A BIG ISSUE IN DEALING
WITH CONGRESS OVER THESE YEARS.
WE COULDN’T GET THE MONEY
APREPARE YAD.APROEP
APPROPRIATED
APPROPRIATED.
AND WE KNEW WE WERE LOSING A LOT
OF REVENUE.
UNDER CURRENT LAW WE’RE LOSING
ABOUT $7 TRILLION OVER TEN YEARS
BECAUSE PEOPLE AREN’T PAYING,
FIRMS AREN’T PAYING WHAT’S
REQUIRED.
IF YOU PUT A FEW SMALL NUMBERS
ON IT, THERE ARE 4 MILLION
PARTNERSHIP TAX RETURNS.
140 A YEAR ARE AUDITED.
THAT DOESN’T MEAN EVERYONE IS
CHEATING.
IT DOESN’T MEAN THAT THIS IS
ANYTHING OTHER THAN SAYING
EVERYONE NEEDS TO FOLLOW THE
SAME RULES.
I’VE ALWAYS BELIEVED THAT BEFORE
YOU TALK ABOUT ANY NEW REVENUES,
YOU HAVE TO MAKE SURE PEOPLE PAY
THE TAXES THAT ARE DUE UNDER
CURRENT LAW.
AND THE SIMPLE LOGIC OF HIRING
PEOPLE, TRAINING PEOPLE, AND
HAVING THE OVERSIGHT IS JUST
OVERWHELMING, WHICH IS WHAT THE
FIVE OF US ARGUE IN THAT COLUMN.
>> BUT THEN WHY WOULD WE EVER
HAVE ALLOWED THIS TO HAPPEN?
FOR EVERY DOLLAR COLLECTED, YOU
GET $6 IN RETURN.
THIS THING MORE THAN PAYS FOR
ITSELF.
I’M TALKING ABOUT THE IRS.
SO WHY WOULD WE EVER HAVE CUT
EVEN ONE SINGLE STAFF MEMBER?
IF YOU LOOK OVER THE LAST TEN
YEARS, THEY HAVE CUT ABOUT 20%.
WHO ON EARTH SAID, WELL, THAT’S
A GOOD IDEA.
>> WELL, I AGREE 100% WITH YOU,
STEPHANIE.
I MADE THAT CASE TO OUR CONGRESS
WHEN I WAS IN THE TREASURY
DEPARTMENT AND WHEN I WAS IN THE
OFFICE OF MANAGEMENT AND BUDGET
IN TWO ADMINISTRATIONS.
WHAT WE’VE SEEN OVER THE YEARS
IS THAT DEFUNDING THE IRS BECAME
SOMETHING THAT WAS SEEN AS AN
ACCOMPLISHMENT FOR SOME IN
CONGRESS.
I THINK RIGHT NOW YOU’RE SEEING
MORE BIPARTISAN FOCUS ON HAVING
THE IRS FUNDED WITH THE
RESOURCES TO DO ITS JOB.
I THINK THIS IS A VERY IMPORTANT
MOMENT.
THERE ARE MAJOR PROPOSALS OUT
THERE TO CHANGE OUR TAX LAWS.
MANY OF WHICH I SUPPORT AND
THINK ARE THE RIGHT WAY TO
INCREASE REVENUES.
BUT THE TRUTH OF THE MATTER IS
IF WE DON’T HAVE A TAX
ENFORCEMENT SYSTEM THAT WORKS,
MONEY LEAKS OUT OF IT AND IT
WILL CONTINUE TO.
SO THIS IS SOMETHING WE NEED TO
DO, WHATEVER YOUR VIEWS ON NEW
TAX PROPOSALS.
AND I THINK IT’S ONE OF THE
REASONS WHY THE FIVE OF US WHO
DON’T AGREE ON ALL OF THE
PROPOSALS TO RAISE NEW REVENUES
AGREE 100% ON THIS IDEA ABOUT
TAX ENFORCEMENT.
>> I WOULD GUESS THAT MOST
AMERICANS WOULD SAY SIMPLY
ENFORCE WHAT’S ON THE BOOKS.
THAT’S HOW YOU ADDRESS THE TAX
GAP.
LET’S TALK ABOUT LOOPHOLES FOR A
MOMENT BECAUSE THAT PROPUBLICA
REPORT HAS PEOPLE ACROSS THIS
COUNTRY FURIOUS WHEN YOU SEE THE
NAMES OF INDIVIDUALS THAT ARE
PAYING ALMOST NOTHING,
CORPORATIONS PAYING NOTHING.
CAN YOU HELP ME UNDERSTAND WHY
DO THESE LOOPHOLES EXIST?
BECAUSE THE TRUTH IS, AND I’M
NOT DEFENDING ELON MUSK.
IT’S NOT NECESSARILY ELON MUSK’S
FAULT OR AMAZON’S FAULT.
THEY’RE LEGALLY NOT PAYING
TAXES.
IT’S LAWMAKERS’ FAULTS.
>> I AGREE WITH THAT TOO,
STEPHANIE.
THAT’S ONE OF THE REASONS WHY A
NUMBER OF THE TAX PROPOSALS THAT
ARE CURRENTLY PENDING MAKE GOOD
SENSE EVEN IF YOU WEREN’T
LOOKING TO RAISE MONEY TO PAY
FOR A INVESTMENT --
>> WHO IS CALLING YOU ON THE
PHONE.
DON’T THEY KNOW YOU’RE ON
TELEPHONE?
>> IT’S THE ONE PHONE IN MY
HOUSE THAT YOU CAN’T TURN OFF
AND UNFORTUNATELY IT’S RIGHT
HERE.
>> WHEN YOU’RE DONE, I’D LIKE
YOU TO CALL THAT PERSON AND ASK
THEM TO WATCH MY SHOW EVERY DAY
AT 9:00 A.M. AND THAT WOULD
NEVER HAPPEN.
OKAY, GO BACK TO THESE
LOOPHOLES.
YOU’VE GOT TO LOOK AT THE
LAWMAKERS, NOT THE COMPANIES OR
THE INDIVIDUALS.
>> YEAH, NO, I THINK THAT OUR
TAX LAWS ARE RIDDLED WITH LEGAL
WAYS TO AVOID TAXES.
YOU KNOW, INDUSTRIES HAVE BEEN
GIVEN THE ABILITY TO STRUCTURE
THEIR FINANCES TO CARRY LOSSES
OVER, TO PAY TAXES AT LOW RATES.
THE ANSWER TO THAT IS CHANGING
TAX POLICY.
I THINK IF YOU LOOK AT A LOT OF
THE PROPOSALS THAT ARE OUT
THERE, THEY WOULD GO A LONG WAY
TOWARDS DOING THAT.
I DO THINK YOU HAVE TO HAVE A
SHARP DISTINCTION BETWEEN PEOPLE
WHO ARE PAYING LOW TAXES BECAUSE
THE TAX LAWS ARE BROKEN AND
PEOPLE WHO ARE NOT PAYING TAXES
BECAUSE THEY’RE CHEATING.
>> THOSE ARE TWO DIFFERENT
THINGS.
>> PEOPLE WHO ARE MAKING
MISTAKES OR CHEATING, TAX REFORM
GETS A CHANGE IN THE TAX LAWS.
WE NEED TO DO BOTH.
>> THOSE ARE TWO VERY DIFFERENT
THINGS.
DO YOU ACTUALLY THINK WE’RE
GOING TO GET THAT TAX REFORM?
YOU COULD TALK TO PEOPLE ACROSS
THE COUNTRY WHO CARE NOTHING
ABOUT POLITICS AND THEY WOULD
AGREE THEY WANT CORPORATIONS TO
PAY MORE, THEY WANT THE SUPER
RICH TO PAY MORE.
BUT WHEN YOU TALK ABOUT CERTAIN
INDUSTRIES AND WHAT THEY CAN
CARRY OVER, THAT MAKES ME THINK
COMMERCIAL REAL ESTATE, THAT
MAKES ME THINK PRIVATE EQUITY.
THOSE ARE INDUSTRIES THAT DON’T
HAVE A LOT OF EMPLOYEES AND
VOTERS BUT THEY GIVE ENORMOUS
AMOUNTS OF MONEY TO LAWMAKERS.
IS THERE ACTUALLY THE POLITICAL
WILL TO CLOSE THESE EGREGIOUS
LOOPHOLES?
>> MY VIEW ON THESE ISSUES WAS
THE SAME WHEN I WAS IN
GOVERNMENT AS IT IS NOW.
WE HAVE TO CLOSE A LOT OF THESE
LOOPHOLES.
WE HAVE TO HAVE A TAX SYSTEM
THAT RAISES MONEY WHERE IT’S
EARNED.
I THINK THE ENVIRONMENT RIGHT
NOW IS AS GOOD AS IT GETS TO GET
SOMETHING SIGNIFICANT DONE.
FIRST, THERE’S A SENSE OF
UNFAIRNESS IN THE WAY THE
ECONOMY DISTRIBUTES INCOME AND
WEALTH THAT IS DEEP.
SECONDLY, THERE’S A MOMENT IN
TIME WHEN THERE’S A PRESIDENT
AND A CONGRESS OF THE SAME PARTY
ABLE TO WORK TOGETHER.
THIRD, THERE’S AN AMBITIOUS
INVESTMENT AGENDA WHERE THE
AMOUNT OF AMBITION YOU HAVE TO
INVEST IN A WORLD WHERE YOU HAVE
TO PAY FOR THE INVESTMENTS IS
LIMITED BY WHAT YOU’RE ABLE TO
RAISE.
NOW, I THINK IF YOU LOOK AT WHAT
THE BIDEN ADMINISTRATION HAS
PROPOSED, IF YOU GET A BIG CHUNK
OF IT ENACTED, IT DOESN’T ALL
HAVE TO BE ENACTED TO BE OF
GENERATIONAL SIGNIFICANCE IN
TERMS OF MAKING THE TAX CODE
MORE FAIR AND IN TERMS OF
INVESTING IN A FUTURE ECONOMY
THAT WORKS BETTER FOR ALL
AMERICANS.
SO I THINK IT’S A MOMENT WHEN A
LOT CAN BE DONE.
I NEVER THOUGHT IT ALL WOULD
HAPPEN.
IT’S A VERY AMBITIOUS PROGRAM.
BUT I THINK THOSE WHO ARE SAYING
IF YOU GET A BIG CHUNK OF IT