How we punish the poor: research shows state far more lenient on tax evasion than benefit fraud

The Shub reports:

Tax discrepancies cost the New Zealand taxpayer around $1.2 billion a year, while welfare fraud is less than $40 million.

But research shows the former are far less likely to be jailed than the latter.

The rich trying to buy a few new sports cars costs the state far more than the poor scrounging for pennies to put enough food on the table.

When it comes to investigating these crimes, while 5 percent of welfare recipients will be investigated, just 0.01 percent of taxpayers will be.

So who is held accountable? There are between 800 and 1000 criminal prosecutions a year for welfare fraud, but just 60 to 80 for tax fraud.

And when it comes to doing time, of the tax dodgers with offending around $270,000, 18 percent will go to prison – for welfare fraudsters with $70,000 of offending, 67 percent will go to jail.

These statistics are unjustifiable. Why do we let the majority of rich tax fraudsters off the hook, while those who commit benefit fraud get punished?

Let’s put the numbers side by side, with the larger emphasised.

                     Tax Fraud Benefit Fraud
Total cost to state ~$1,200,000,000 <$40,000,000
Imprisonment rate   18%         67% 
Offender average $229,000 $76,000

The government’s failure to combat tax ‘evasion’ and their overly punitive approach to beneficiaries shows how they’d rather punish the poor than the rich when they take more than they should. Looking at these numbers, it’s clear who’s taking more and who’s being punished more- and it’s not those who need it.

Why don’t we call tax evasion what it is: fraud.

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