The GOP’s first policy bill would defund President Joe Biden’s efforts to help the Internal Revenue Service crack down on tax cheats. It’s a bill that’s predicated on disinformation, whose only real constituency is wealthy people who don’t want to pay their fair share. And it underscores how the Republican Party’s so-called populism isn’t about empowering the working class — it’s about exploiting them.
After a historic struggle to become House Speaker, Kevin McCarthy immediately tried to rally the troops on Saturday by promising to “repeal funding for 87,000 new IRS agents, because the government should be here to help you, not go after you.” It was classic red meat for the base: For months, Republicans have messaged that the new agents would be recruited into a heavily armed “shadow army” designed to weaponize the IRS against the middle class. Conservative activists and media, which have frequently and wrongly accused the IRS of bias against the right, enthusiastically encouraged these claims.
Additional IRS funding would not be a worry for the middle class, but for elites.
This narrative is a work of fiction. In reality, the funding is going toward an understaffed federal agency in desperate need of personnel to perform its basic functions. The IRS’s staff size today is the same as in 1970, and there are a lot more tax returns to deal with today. The 87,000 figure refers to the total number of employees that would be hired by the Treasury Department, and a majority will not be agents involved with enforcement. According to the Treasury, just 1 percent of new employees would be agents assigned to details that require carrying firearms.
Additional IRS funding would not be a worry for the middle class, but for elites. As experts like Georgetown University’s Don Moynihan have pointed out, an understaffed IRS is of greatest benefit to the rich, whose finances are more complicated to evaluate, and who are more adept at finding loopholes. “The audit rate for individuals earning more than $1 million has been divided by 4 since 2010, feeding massive tax dodging,” he noted in August. (The IRS has had its budget cut nearly 20 percent since 2010.) The Treasury Department has said it will focus on hiring staff with experience working with large corporations and high-net-worth individuals. It also says that taxpayers making less than $400,000 a year will not see an increase in audits, but they will get better customer service with extra funding.
A reduction in tax dodging doesn't just mean more fairness under the law. It means more revenue for the government to carry out its services for citizens. The Congressional Budget Office estimates that the additional funding will improve tax compliance and generate roughly $180 billion of revenue through 2031.
Theoretically anybody who likes to complain about the federal deficit — as Republicans do — should be fond of the idea of a highly functional IRS, since it’s a rare opportunity to generate more government revenue without additional taxation. But they’d rather exploit milquetoast reform efforts at the IRS for political fear-mongering and shielding the 1 percent. Meanwhile the CBO says that the Republicans’ new bill would add $114 billion to the deficit over the next decade.
When Democrats controlled the House in the last Congress, their first bill focused on voting rights and campaign finance and ethics reform. The Republicans’ first major policy bill is a similarly succinct illustration of their values. The GOP is mostly fiercely loyal to the rich and the powerful, and they enthusiastically mislead ordinary Americans to serve those interests.