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Research report

Focus on the Tax 'Avoidance' Gap

Eric Toder
September 10, 2009
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Abstract

President Obama's tax reform task force has been asked to propose ways to close the $300 billion tax gap, which is the estimated difference between taxes owed and taxes paid either voluntarily or through enforcement. But the amount of money lost to legal tax avoidance - the difference between an income tax without special tax preferences and taxes under current law - at least double that lost to outright evasion. The perpetrators of this second, "avoidance" tax gap are legislators, not taxpayers. The panel's main focus should be on finding appropriate ways to close this second tax gap.

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Campaigns, Proposals, and Reforms Fundamental reform proposals Federal Budget and Economy Federal revenue Individual Taxes Tax compliance (individual)
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Meet the Experts

  • Eric Toder
    Institute Fellow and Codirector, Tax Policy Center
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