Welcome to Cato Daily Podcast. I'm your host Anastasia Glova. Once again, it's finally Friday, but before I send you off to enjoy the weekend, let's talk taxes.

Politicians have a habit of worrying about the tax gap today estimated to be at

two hundred ninety billion dollars or fourteen percent of total taxes owed. In the

latest tax and budget bulletin Cato senior fellow Daniel Mitchell explains that closing the tax gap through

draconian additions to the tax code is simply unnecessary.

Could you tell me why we're always hearing politicians fussing about the tax gap.

The tax gap is an estimate of unpaid taxes owed by American taxpayers.

It's concocted by the IRS.

I have my suspicions about the tax gap. The IRS obviously

has an incentive to exaggerate it and make it seem like there's all these taxes out there

that people aren't paying. The estimate is basically about $300 billion a year. Take it with a grain

of salt, but there definitely are some taxes owed that aren't paid.

How large is the net tax gap today?

Well, again, they do say it's about $300 billion a year.

That's a bit over 10% of the taxes that are supposed to be paid that supposedly aren't being paid.

Again, I have a lot of doubts about whether the... to be paid that supposedly aren't being paid.

Again, I have a lot of doubts about whether the IRS can be trusted to produce an

unbiased estimate.

As a matter of fact, if you look at some of the IRS research and publications and publications

and the Treasury Department publications and

analysis on this it turns out that a lot of this is extremely

speculative they sort of extrapolate based on audit rates and things like that

...