This paper examines the multifaceted nature of tax compliance gaps in the United States and their extensive, often overlooked, consequences on federal infrastructure investment and ultimately, overall economic development performance. The gross federal tax gap, representing the difference between taxes legally owed and those collected on time, was projected at approximately $601 billion in 2020 and has since risen to an estimated $688 billion in 2021 and nearly $700 billion in 2022, highlighting its continued growth in recent years. While the direct revenue loss is a critical fiscal concern, the analysis in this paper extends beyond these headline figures to explore the less visible but equally significant systemic costs challenges of the United States tax system, including administrative complexity, regulatory uncertainty, excessive time burdens, and compliance expenditures that disproportionately affect small businesses, lower-income households, and taxpayers with limited access to professional advisory services. Such inefficiencies divert capital and labor from productive economic activity, discourage voluntary compliance, and erode public confidence in the administration of the tax laws. Drawing from peer-reviewed literature, empirical data from the Internal Revenue Service and Congressional Research Service, and policy analyses from reputable institutions, the study assesses the composition, causes, and distributional effects of the compliance gap, specifically the trend in enforcement, the loss of IRS capacity through budgetary cuts, and the unfair concentration of audit resources on low-income taxpayers alongside the insufficient auditing of high-income individuals and large corporations. These dynamics not only exacerbate inequality but also compromise enforcement deterrence, allowing underreporting to persist. By quantifying the opportunity costs of noncompliance, particularly the foregone capacity to fund long-term, high-impact infrastructure projects, the research establishes a stronger conceptual link that exists between fiscal inefficiency and underinvestment in public goods. The annual net tax gap exceeds typical yearly budgets allotted by the Bipartisan Infrastructure Law, underscoring the potential for improved compliance to serve as a sustainable revenue source the need to raise statutory tax rates. In doing so, the study positions the tax gap not merely as a technical issue of collection but as a structural limit on economic growth, competitiveness, and equity, and it ends with policy-relevant recommendations intended to improve compliance, modernize enforcement, and rebalance federal fiscal capacity with long-term development objectives.