The tax gap is a real problem but so, too, is the ‘reverse tax gap’

As our elected officials debate how best to address a national debt approaching $30 trillion while simultaneously increasing spending levels and addressing wealth inequality, it should not be surprising that tax policy is at the forefront of the discussion

In that context, there has been an especially intense focus on the tax gap. That “gap” is the amount of tax that taxpayers legally owe the U.S. government but is not actually collected.

The tax gap, however, is a macro measurement based on estimates surrounding millions of taxpayers. It does not translate consistently at the individual level. In fact, many people — at all levels of taxable income — embody what some have referred to as a “reverse tax gap.”

These people overpay their taxes, often repeatedly. Given this phenomenon, while reducing the tax gap seems a laudable goal, reducing the reverse tax gap should also be prioritized.

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