One of the Ways in which Inequality Grows
Most income of most people is in the form of salaries or wages. The amount paid in each case is reported to the IRS. Taxpayers can’t cheat. Richer people tend to have more income as to which there’s no way the IRS can check to see if it’s accurate. The IRS estimated in 2019 that Americans conceal from taxation more than half of income that is not subject to some form of third-party verification.
From the government’s point of view (and from the honest taxpayer’s point of view), it would be highly cost effective to set up procedures to minimize such leakage of tax revenues. Unfortunately, it’s the policy of Republican political leaders to keep the IRS underfunded so that the agency isn’t able to adequately enforce tax collection. Republican big donors to political campaigns, on average, prefer to donate smaller amounts to friendly politicians than pay larger amounts in taxes.