IRS Could Collect $561 Billion From Rich Tax Cheats—Unless GOP Guts Funding
IRS Could Collect $561 Billion From Rich Tax Cheats—Unless GOP Guts Funding
"Congressional Republicans' efforts to cut IRS funding show that they prioritize letting the wealthiest Americans and big corporations evade their taxes over cutting the deficit," said the director of the National Economic Council.
The Internal Revenue Service says it could collect around $560 billion largely from rich tax cheats and big corporations over the next decade—as long as congressional Republicans don't succeed in clawing back a recent funding increase that allowed the agency to ramp up enforcement.
The Inflation Reduction Act (IRA), which President Joe Biden signed into law in 2022 without any Republican support, gave the IRS an $80 billion funding boost after years of budget cuts inflicted by the GOP.
The cuts severely compromised the agency's ability to audit the wealthy and big businesses, which often have more complex returns. According to an IRS and Treasury Department analysis released Tuesday, "the audit rate on millionaires fell by more than 70% from 2010 to 2019, and the audit rate on large corporations fell by more than 50% over the same period."
The IRA funding boost has given the agency much more capacity to pursue rich tax cheats. Last month, the IRS said it has collected more than $500 million from wealthy tax dodgers since 2022.
The new Treasury-IRS analysis estimates that if the IRA funding boost remains in place, federal revenue would increase by as much as $561 billion over the next 10 years—a significant return on the IRA's $80 billion investment.
"The administration has proposed extending and maintaining IRS investments after the IRA funds are exhausted, which would enable the IRS to collect $851 billion over 2024-2034," the agencies said.
But if $20 billion of the $80 billion funding boost is rescinded, the IRS would bring in over $100 billion less in revenue over the next decade than it would with the increase intact, the analysis shows.
"This analysis demonstrates that President Biden's investment in rebuilding the IRS will reduce the deficit by hundreds of billions of dollars by making the wealthy and big corporations pay the taxes they owe," Lael Brainard, director of the White House National Economic Council, said in a statement Tuesday. "Congressional Republicans' efforts to cut IRS funding show that they prioritize letting the wealthiest Americans and big corporations evade their taxes over cutting the deficit."
As part of a debt ceiling agreement with Republicans last year, President Joe Biden and Democratic congressional leaders agreed to rescind $20 billion from the IRS funding boost enacted by the IRA—a deal that drew outrage from progressives.
Democratic and Republican lawmakers subsequently agreed to implement the $20 billion rescission all at once in 2024 instead of spreading out the cuts over two years, and House Speaker Mike Johnson (R-La.) has made clear that he intends to pursue additional IRS cuts, which would further undermine the agency's ability to crack down on tax dodging and modernize its technology.
"Anyone trying to rescind funding from the IRS just wants to let wealthy and corporate tax cheats off the hook," the advocacy group Americans for Tax Fairness wrote on social media Wednesday.
I wonder how that much money could affect the budget deficit Republicans care so much about
Uh lets see...
Flips Open Republican Talking Points Playbook, dumps out some ash from Rush Limbaugh's cigars
Oh! Taxing the wealthy discourages job growth!
But sir the numbers don't actually add up even if you-
Shut up kid, this'll work.
This much is absolutely true: “Anyone trying to rescind funding from the IRS just wants to let wealthy and corporate tax cheats off the hook.”
The biggest falsehood here is that the US government needs to collect this money in order to pay for stuff. There are reasons to collect it, but that’s not actually one of them. Why The Government Has Infinite Money
Great video. People forget that money isn't real.
Fuck the GOP.
The way the IRS choose to allocate their time and resources is entirely their own discretion. I doubt anyone would mind at all if they just dedicated themselves to perusing high net worth tax dodgers to the exclusion of all others. Yet every time funding is brought up there’s this implicit threat that if they don’t get more money then they will just have to let the rich get away with it, but never anyone else.
I think you aren't thinking out this problem. While its not great that the IRS "targets" the poor. Its just simply they are the least likely to fight back against and will pay their debt in full. The rich, they fucking drag that shit out with lawyers, they have to try to hide it so you need well trained financial forensics to notice it and document it all and at the fucking end of it all, you are only getting a fraction of what you are literally owed. We want the government to be "efficient" yet we are complaining about the IRS doing their assigned task in an efficient manner because newsflash the lower income audits typically are far more automated, so they are simpler to do when your budget is limited.
Edit: Also I would like it to be remembered that the IRS are merely enforcers of the tax code. They aren't exactly the ones who set it in place, they are just doing what they can with what they were given. Hell I'm fucking happy they allocated time and money for the free filling system. Its a step in the right direction because fuck the tax refund companies who lobby our government to make the taxes as painful/annoying as they currently are, when the tax man sort of already knows most of the information they are requesting like many other countries in the first world.
They don’t have to target the poor just because it’s easier. They are an enforcement agency, not a profit generating entity. Their budget is allocated and completely independent of any funds they recover.
“Its more efficient to audit the poor” is also a blatant lie that gets tossed around so much people just accept it as truth. You get way higher ROI from auditing the wealthy, even with the added difficulties. When your resources are limited you should focus on the highest ROI, but every time they want money they threaten to do the opposite.
I mean the game theory secret is most people could cheat on their taxes with little to no smart concealment effort and get away with it for, well, I guess forever, or their life. I mean you need extra income to do it... but still. The average audit/catch/recovery rate of everyday people is abysmal, you can't draw blood from a stone and people who are comfortable not paying taxes usually aren't making the best life decisions.
"Good thing could happen unless GOP" is pretty much American politics since at least Reagan
It literally doesn't make sense to pursue tax evasion from regular people first, because the return they'd get is miniscule, comparing to the rich. I understand pursuing it at the end for the sake of "justice", but get the big players first before you move to the pawns, who probably wouldn't even need to tax evade if the government used the money the rich are hiding to address poverty. Crime and poverty are inseparable. You cannot address the crimes of those in poverty without addressing poverty. And when you address the poverty, the crime will be marginal.
What sort of noodle-brained moron thinks defunding the IRS is in any way good for anyone? It's the agency that collects the money! The money we all need for government to exist! The money that paves roads and builds schools and buys fighter jets and sends rocket ships to Mars. Even if you don't like all those things, surely there's something you think the government should be paying for. Defunding the IRS doesn't make us spend less! The costs saved are far outweighed by the money uncollected, and we go further into debt!
If you want the government to spend less money, you cut programs we spend money on. If the government was your personal budget, defunding the IRS is like trying to save money by taking fewer shifts at work to save on your bus fare for the commute.
But paying taxes will lower our quarterly profits and I am paid a LOT of money not to think of anything beyond the next quarterly report!
that's a little over 70 new margaritavilles