US Treasury secretary Henry Paulson has told the Senate that trying to reduce the level of uncollected tax significantly would do more harm than good.

His comments came just a week after leading Democrats and the General Accounting Office looked to the fabled 'tax gap' to collect more money without seeming to increase tax rates,

But Paulson told a Senate hearing: ‘There is a big part of the tax gap that we simply won't be able to reach without adding draconian and painful requirements on all taxpayers. The cost of compliance for individuals and businesses, most of whom already pay what they owe, would far outweigh the gains.’'

Last week, the Government Accountability Office said that improved IRS reporting would help the IRS bring in more of the $345bn in taxes that supposedly go unpaid each year.

Further reading:

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