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Even Biden's IRS plan faces sharp Republican pushback

Strengthen the IRS to enforce existing tax laws seems like the sort of thing that would enjoy bipartisan backing. Chuck Grassley is balking anyway.
Chuck Grassley
Sen. Chuck Grassley, R-Iowa, on Capitol Hill on Feb. 12, 2020.Alex Brandon / AP

President Joe Biden's ambitious domestic agenda is facing plenty of scrutiny on Capitol Hill, and as is usually the case, the fiercest argument is over how best to pay for the White House's priorities. Biden has proposed rolling back many of Donald Trump's ineffective tax breaks, which is a popular approach conservatives refuse to consider.

But Biden has also called for strengthening the Internal Revenue Service, which seems like the sort of move that should generate broad support. As we discussed last month, the IRS has been gradually undermined for years, which in turn has made it far more difficult for the agency to be aggressive in pursuing possible tax cheats, which in turn has meant less revenue for policy priorities.

Spending more on the IRS would almost certainly mean a lot more money for the treasury. As Catherine Rampell explained in a recent column, "How do you raise tax revenue without raising taxes? By increasing enforcement of existing tax law and making sure every penny already owed gets paid."

By some measures, strengthening the IRS could generate an additional $700 billion in tax revenue over the next decade -- not by raising taxes, but simply by enforcing the laws already on the books.

The editorial board of the Des Moines Register recently published an editorial endorsing this approach and urging Sen. Chuck Grassley (R-Iowa) -- up until recently, the chairman of the Senate Finance Committee -- to help "lead the charge to ensure tax scofflaws are pursued."

Soon after, Grassley wrote a response. Evidently, the Republican isn't impressed.

The Biden administration claims more money for enforcement would allow the IRS to collect at least $700 billion. Outside experts have disputed this rosy revenue scenario. Even if this pipe dream is realized, the extra revenue is dwarfed by the Democrats' $6 trillion spending agenda. And businesses of all sizes would incur new and burdensome compliance costs and reporting requirements along the way. Instead of promising a chicken in every pot, Biden's plan promises an auditor at every kitchen table.

The longtime GOP senator added in his op-ed, "The IRS also has a trust deficit. During the Obama administration, the IRS was weaponized to target conservative political organizations." I realize Republicans like to pretend this is true, but it's not. In reality, as Grassley really ought to know, the IRS was not weaponized to target conservative political organizations.

Nevertheless, on Twitter, where Grassley is known for writing in a distinct, idiosyncratic way, the senator added yesterday, "2day is federal TAX DAY Im all for catching tax cheats +closing tax gap BUT Biden plan 2pump more $$ into IRS & expand bank reporting is ripe for overreach + imposes more burdens on small biz/family farms.... If the IRS gets its eyeballs on personal bank accounts that's a big can of worms for the tax collector 2decide who gets audited & why Don't lose focus on taxpayer service to improve compliance."

Decoding this, it appears Grassley is rejecting the White House's plan.

So let's take stock. There's broad agreement for the need to invest in U.S. infrastructure. Can we inch the corporate tax rate higher? Republicans say no. Can we ask more of millionaires and billionaires? Republicans say no. Can we strengthen the IRS to enforce existing tax laws? If Grassley's position is any indication, Republicans are saying no to that, too.

It's almost as if the GOP isn't approaching the issue in a serious way.