The recent exposé from Pro Publica which published sensitive tax information from wealthy Americans has caused quite a stir. Their justification to disclose “the tax details of the richest Americans” was based on the belief that “the public interest in an informed debate outweighs privacy considerations.” This is simply outrageous. Keeping individual taxpayer data private is the fundamental pillar under which the IRS can even ask individual’s for their personal information. The assertion that the ethics of collectivism is more important than rights of the individual — that others can come along and decide that they have more rights to your private affairs than you do – is just nonsense.
In a similar way, people need to understand just how egregious this breach of data is. Pro Publica “obtained the information from an anonymous source who provided us with large amounts of information on the ultrawealthy, everything from the taxes they paid to the income they reported to the profits from their stock trades.” Now, it is a fundamental principle of the IRS that any information given by a taxpayer to the IRS is absolutely confidential to the highest degree. Anyone who peeks at a tax return that is not under their purview typically results in being instantly fired. This is why people typically go after lawyers, accountants, banks, etc., to get copies of someone else’s return — because the IRS will never divulge taxpayer information.
It is outrageous therefore, that this trove of data was leaked, and it is even more outrageous if the source is actually from within the IRS. It is equally bad if the IRS was hacked. No one (except possibly Pro Publica) knows how this information was released. No one person working at the IRS should have had access to this volume of information. The IRS is conducting its own external and internal investigations because it takes taxpayer privacy extremely seriously. If it turns out that the anonymous sources originated within the IRS, this exposé becomes a breach of contract with all American taxpayers.
What’s even more outrageous is that some members of Congress didn’t immediately condemn this publishing of private tax data. Instead, Sen. Elizabeth Warren took the occasion to push her agenda, saying that “ Our tax system is rigged for billionaires who don’t make their fortunes through income, like working families do.″ Likewise, Sen. Ron Wyden, head of the tax-writing Senate Finance Committee, remarked that the information “reveals that the country’s wealthiest, who have profited immensely during the pandemic, have not been paying their fair share of taxes.”
These comments are not only economically and fiscally ignorant, but show an incredible misunderstanding of the basic principles that form our tax system. Elizabeth Warren’s ignorance is legendary. But Wyden, as head of Senate Finance, should be ashamed of himself. The crux of Pro Publica’s argument, that the rich aren’t paying their fair share (gullibly accepted by Warren and Wyden) factor in a statistical fallacy that somehow the calculations of an effective tax rate should factor in the fair market value (FMV) of all assets owned by an individual. This is reckless stupidity.
The fact that the initial response of these Senators was not full of outrage over the exposure of personal tax information is disgusting. They have no respect for their responsibility to protect the American taxpayer. Couple that with their economic ignorance and it is clear that they should resign immediately and disappear from the public square.