Democrats Want Crackdown on Tax Frauding Companies, The Party of WAAAAAAAA Cries It's Hard Work

Herald Sun

Several Senate Democrats said Wednesday the government should crack down on businesses that evade taxes before Congress considers Social Security or tax changes.

"We should not cut the benefits of any law-abiding retiree by one dime or raise the taxes of any law-abiding worker by one dime until we have done our best to ensure that all taxpayers are complying with the current tax laws," said Sen. Max Baucus of Montana, the top Democrat on the Senate Finance Committee.

J. Russell George, the Treasury Department's inspector general for taxation, told lawmakers that the government loses billions of dollars annual because businesses avoid paying the employment taxes that fund Social Security and Medicare.

The committee chairman, Sen. Charles Grassley, said some proposals to collect unpaid taxes or expand the reach of employment taxation might be too difficult to pass.

He said lawmakers should not be too optimistic about tax collections and view such proposals as "ripe fruit on the ground waiting to be picked up."

Businesses organized as sole proprietorships pay employment tax on all reported profits. Businesses organized as S corporations pay tax only on the amount described as salary.

George said these S corporations have become a multibillion-dollar employment tax shelter for single-owner businesses.