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Home Publications Blogs Beat the Press Shocking News: Not Everyone Who Got Stimulus Money Paid Their Taxes!

Shocking News: Not Everyone Who Got Stimulus Money Paid Their Taxes!

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Tuesday, 24 May 2011 04:36

The Washington Post called readers attention to this shocking item today in an article on a new report from the Government Accountability Office that found stimulus recipients owe $750 million in taxes on $24 billion in stimulus payments. Of course people cheat on their taxes on non-stimulus income also.

It would have been helpful to compare the rate of cheating on stimulus with non-stimulus income to determine if compliance was especially bad with stimulus income. The Internal Revenue Service reported that $345 billion in taxes went uncollected in 2006, more than 4 percent of total income in that year. This suggest that the rate of tax evasion with stimulus funds (@ 3.1 percent) might be somewhat lower than with income more generally. The Post should have included this comparison.

Comments (6)Add Comment
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written by izzatzo, May 24, 2011 6:25
Also not reported was the absence of stimulus spending by the rich due to tax cuts since it's considered lying ex ante and not cheating post hoc.
internal consistency
written by frankenduf, May 24, 2011 8:13
actually, this scenario was fostered by the feds- since goldman got paid 100 cents on the dollar for their AIG debt, geithner et al saw the ethical light and don't care if stimulus recipients keep 100 cents on the dollar either
A webcomic about the stimulus
written by Eat the Babies, May 24, 2011 8:34
The press loves to make non-stories into stories. There was a great example on that numbers podcast out of Britain where the press made a huge deal out of the fact that some form of birth control had a failure rate, and they way they phrased it made it sound exceptional, but when you really thought about it you realized that it was actually really effective for birth control. No birth control is perfect.

Anyway! My web-comic today happens to be about the stimulus: a fictitious John M Keynes talks to his therapist about the big Obama plan - http://eatthebabies.com/?p=103.
Cheating?
written by Downpuppy, May 24, 2011 2:37
I didn't see anything in the article about hiding income, cheating, or fraud. "Unpaid" generally refers to taxes assessed, but not paid, usually due to lack of funds. (There is a tentative suggestion of another $160 million in tax on missing filings) Which makes sense, if a lot of these companies are going belly up.
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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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