As one of their first moves in the House majority—after their little struggle to even elect a speaker, that is—Republicans have a bill to roll back more than $70 billion in IRS funding included in the Inflation Reduction Act. In fact, fresh off his contentious election as speaker, Kevin McCarthy bragged about this plan, saying, “I know the night is late, but when we come back our very first bill will repeal the funding for 87,000 new IRS agents.” (That 87,000 number is a lie, by the way.)
Funny story, though: The Congressional Budget Office is out with its estimate of the fiscal impact of this bill cutting more than $70 billion … and it would decrease federal revenue by $186 billion between 2023 and 2032. In other words, the bill would cost more than $114 billion.
Those Republicans, always looking out for us!
RELATED STORY: GOP now trying to incite violence against IRS agents
The claim here is that it’s going to help the little people—they’re even calling the bill the “Family and Small Business Taxpayer Protection Act”—because that sounds a lot better than admitting that the Inflation Reduction Act’s IRS funding is about making sure the very wealthiest pay the taxes they owe. Yes, it means hiring new auditors, but ones specifically tasked with pursuing wealthy tax evaders, not small businesses or families making less than hundreds of thousands of dollars a year. In fact, households with earnings of less than $400,000 a year “will likely see the chance of an audit decline,” according to the Treasury Department.
That’s because right now, the lowest-income households are audited at far higher rates than the highest-income ones. The money that Republicans want to repeal is intended to change that. That change would have significant revenue benefits for the nation, since the money that rich people aren’t paying is going to add up a lot more quickly than money that poor people aren’t paying. This is why a bill that seems to be about cutting $70 billion in government spending would actually cause a $186 billion reduction in government revenue. By letting rich people off the hook.
But Republicans have laid the groundwork for this bill with a months-long campaign demonizing IRS agents and attempting (sometimes successfully) to incite violence against them by claiming that the new funding will be used for a new cadre of armed agents coming after People Like You. Fox News has relentlessly pushed this rhetoric, making false claims about the Inflation Reduction Act’s IRS funding hundreds of times in just the first 20 days after that bill was released. In reality, those “87,000 new IRS agents” aren’t specifically included in the law and even if the IRS hires 87,000 new workers, many of them would be in clerical or other support roles. So the Republican base is primed, based on a lie, to be really excited about letting rich people cheat on their taxes without fear of an audit discovering it.
Interestingly, the Republican bill to gut the IRS’s ability to collect taxes from wealthy tax evaders also specifically exempts another part of the new law’s IRS funding: the part intended to move the U.S. toward a free e-file system. Such a system has been fiercely opposed by the companies that profit from the current state of affairs—tax preparation businesses like TurboTax parent company Intuit. Those companies profit from keeping it difficult to file taxes, and they do not want the government coming up with a system making things easier. And House Republicans are taking aim at that funding, too. In a bill they’ve named for “families and small businesses.”
It’s a choice between the government having, over the next decade, an additional $186 billion in revenue collected from wealthy people who owe that money—not new taxes, just making sure they pay like the rest of us do—or saving $70 billion and not having that $186 billion to dedicate to things like clean energy rebates and tax credits. Those are the choices, and Republicans have not only made their choice, they’ve aggressively campaigned on the idea that the latter is the only reasonable way to go.
The House votes Monday night on the hideous Republican rules package. Daily Kos will have live coverage.