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Image: FILE PHOTO: The Internal Revenue Service building is seen in Washington
The Internal Revenue Service building in Washington on Sept. 28, 2020.Erin Scott / Reuters file

Despite agreement, Republicans reject plan to bolster tax police

President Biden offered Republicans a way to pay for infrastructure without raising tax rates. They balked anyway.


It was nearly a month ago when President Joe Biden and a bipartisan group of senators made a striking announcement: they'd reached a compromise agreement on an infrastructure plan. All policymakers had to do before passing it was apply the finishing touches.

That, of course, is easier said than done.

From the outset, Republicans prioritized one goal above every other consideration: Donald Trump's tax breaks for the wealthy must be shielded at all costs. GOP lawmakers were open to some kind of infrastructure deal, just so long as the party's 2017 tax plan remained entirely intact. The White House ultimately agreed and the compromise instead intended to pay for the investments by, among other things, bolstering the Internal Revenue Service -- a plan that would generate revenue through improved tax-law enforcement.

Much of the right balked, and it wasn't long before senators conceded that this part of the plan was being reconsidered. The president told reporters that the process was in "good shape," though he quickly added that there might be "some slight adjustments" to how the investments would be paid for.

As of yesterday, the straightforward idea that garnered bipartisan support nearly a month ago is now gone from the compromise plan altogether.

The Republicans' lead negotiator for a bipartisan infrastructure bill said Sunday that lawmakers had dropped a proposal to boost IRS enforcement as a way to pay for the package. Increasing IRS enforcement of tax collections to pay for the $579 billion bill had emerged as a point of contention among Senate negotiators, with many conservative anti-spending groups and lawmakers expressing concerns.

Sen. Rob Portman (R-Ohio), one of the key negotiators in the infrastructure process, told CNN yesterday, "One reason it's not part of the proposal is that we did have pushback." He was referring, of course, to opposition from within his own party.

It's not yet clear how, or whether, senators will replace the revenue this provision was expected to generate though they'll have to decide quickly: Senate Majority Leader Chuck Schumer (D-N.Y.) intends to hold a procedural vote on the compromise plan the day after tomorrow.

While we wait, it's worth appreciating what GOP senators are telling the public about their priorities. As we've discussed, Republicans began by saying the party's Trump-era tax breaks are untouchable, and Biden responded by presenting them with a measure that would generate billions without touching tax rates. All negotiators had to agree to was a plan to enforce existing tax laws that are already on the books.

And it now appears that wasn't good enough for the minority party, either. For all the Republican rhetoric about supporting law enforcement, they can't bring themselves to support those who enforce the tax laws.

For tax cheats, all of this may seem like great news, but they shouldn't get too comfortable: Democrats are also pursuing a parallel proposal focused on "human infrastructure," which would pass without GOP support through the budget reconciliation process.

What's to stop the governing majority from bolstering the IRS in the Democratic legislation? Nothing.