Kevin McCarthy grins as he grips a gavel
Kevin McCarthy grins as he grips a gavel (U.S. House photo)

When the Repub­li­can-run U.S. House of Rep­re­sen­ta­tives, as its first leg­isla­tive act, vot­ed 221–210 to roll back $71 bil­lion in new fund­ing for the Inter­nal Rev­enue Ser­vice, cheers came from new­ly pow­er­ful Repub­li­can law­mak­er Cathy McMor­ris Rodgers, R‑Washington (5th Con­gres­sion­al District).

“The last thing East­ern Wash­ing­ton fam­i­lies need is to be squeezed by the IRS for every last pen­ny, but that’s what Pres­i­dent Biden and Democ­rats planned when they an $80 bil­lion, 600 per­cent increase in the IRS bud­get last year,” said CMR, new chair of the House Ener­gy and Com­merce Committee.

McMor­ris Rodgers is try­ing to be to polit­i­cal spin what Jeff Beck was to gui­tar jam­ming. She is, how­ev­er, hit­ting sour notes, and play­ing a tune con­coct­ed to please the super-rich. The legislation’s real intent is to starve resources need­ed to audit the nation’s wealth­i­est taxpayers.

The House Repub­li­cans’ bill will nev­er make it through the Demo­c­ra­t­ic-con­trolled Sen­ate and would sure­ly be vetoed if ever it makes it to Pres­i­dent Biden’s desk.

Were it to some­how become law, how­ev­er, the Con­gres­sion­al Bud­get Office esti­mates it would increase the fed­er­al deficit by at least $115 bil­lion over the next 10 years, due to rev­enue not realized.

“Only this extreme Repub­li­can major­i­ty would use its first bill of the 118th Con­gress to embold­en tax cheats and cut ser­vices for work­ing Amer­i­cans: For decades, Repub­li­cans have been cut­ting nec­es­sary resources from the IRS,” Rep­re­sen­ta­tive Suzan Del­Bene, D‑Washington, a mem­ber of the tax-writ­ing House Ways and Means Com­mit­tee, said in a statement.

The Wash­ing­ton Post’s Fact Check­er col­umn gave the Repub­li­cans and their leg­is­la­tion four Pinoc­chios for false­hoods. It labeled House Speak­er Kevin McCarthy’s warn­ing of “87,000 armed IRS agents” a “Zom­bie false­hood.” Poli­ti­fact rat­ed Repub­li­can claims as “most­ly false.” But McCarthy boast­ed of a promise kept, say­ing: “We believe gov­ern­ment should be to help you, not go after you.”

Help who? A Repub­li­can Con­gress, in 2017, pushed through a mas­sive tax cut scheme that swelled the fed­er­al deficit while send­ing the lion’s share of its ben­e­fits to upper income tax­pay­ers. McMor­ris Rodgers was a big boost­er, tweet­ing up a storm on its ben­e­fits to ordi­nary folk in East­ern Washington.

At the same time, the rich have had far less to fear of being audit­ed by the IRS. The Inter­nal Rev­enue Ser­vice has seen its bud­get cut by fif­teen per­cent in the past decade. It last report­ed 79,000 employ­ees, down from 95,000 in Fis­cal Year 2012.

Staffing at the IRS is at 1970s lev­els. Audits are down, with the great­est decrease com­ing for those with annu­al incomes of more than $200,000.

Of the super-rich, accord­ing to the Gen­er­al Account­ing Office, 21 per­cent of those report­ing more than $10 mil­lion in income for 2012 were audited.

By 2019, the fig­ure had fall­en to 3.9 percent.

We’ve been treat­ed – final­ly – to release of Don­ald Trump’s tax returns.

He paid $750 in 2017, and zero for his last year in office.

Trump claimed and wrote off huge los­es. Unlike pre­de­ces­sors of both par­ties, he was not audit­ed for two years while in office. The absence of audits has been attrib­uted to pres­sure or fear of the ex-pres­i­dent. But there’s anoth­er expla­na­tion – the IRS’ short­age of peo­ple trained to take on the com­plex task.

Accord­ing to the Gen­er­al Account­ing Office, “it takes four to five years to train a new hire to become an expe­ri­enced senior or expert rev­enue officer.”

Ex-IRS Com­mis­sion­er Charles Ret­tig, a Trump appointee, warned Con­gress last year that the agency’s work­force was due to fall fur­ther, and that it would need to “replace more than 50,000 work­ers lost through attri­tion over the next six years.”

In draft­ing the Infla­tion Reduc­tion Act, crown­ing achieve­ment of the 117th Con­gress, the Democ­rats took note of an agency exist­ing on star­va­tion diets and result­ing impact on the fed­er­al treasury.

The non­par­ti­san Joint Com­mit­tee on Tax­a­tion has esti­mat­ed there is a $381 bil­lion-a-year gap in what is owed to Uncle Sam and what is actu­al­ly paid.

Hence, the Infla­tion Reduc­tion Act moved to restore the IRS by boost­ing its spend­ing by $80 bil­lion over the next ten years.

We’re talk­ing about a decade.  The tax agency won’t just go out and hire 87,000 agents overnight, as Kevin McCarthy would have you believe.

Of the $80 bil­lion, $46 bil­lion would be spent on enforce­ment. The Trea­sury Depart­ment has promised there will be no increase in audits of those report­ing incomes of $400,000 or less. The rich won’t be soaked – the 2017 tax cut scheme made sure of that – but they will hope­ful­ly be made to bathe on a reg­u­lar basis.

The increase goes to oth­er uses as well, $25 bil­lion to oper­a­tions, with $4.8 bil­lion to be spent on mod­ern­iza­tion of cus­tomer service.

Rep­re­sen­ta­tive Del­Bene not­ed: “I hear from con­stituents reg­u­lar­ly who can­not get through to the IRS or are hav­ing prob­lems with their tax returns.

“The addi­tion­al resources that Democ­rats enact­ed last year in the Infla­tion Reduc­tion Act are meant to improve tech­nol­o­gy, hire more per­son­nel to ensure cor­po­ra­tions and wealthy indi­vid­u­als pay their fair share.”

Four decades ago, the Rea­gan Admin­is­tra­tion pushed through Con­gress a big tax cut pred­i­cat­ed on the trick­le down the­o­ry, that ben­e­fits bestowed on cor­po­ra­tions and the rich would gen­er­ate growth and ulti­mate­ly ben­e­fit all. Still, after tout­ing tax cut ben­e­fits in one nation­al­ly tele­vised speech, Pres­i­dent Rea­gan threw in a kick­er: He said we must assure that the tax­es still owed get collected.

Any­body mak­ing the Gipper’s pledge in today’s Repub­li­can House Cau­cus would find them­selves labeled a RINO and a vic­tim of heavy sar­casm on Rupert Mur­doch’s FNC. McCarthy & Co. have enti­tled their bill the “Fam­i­ly and Small Busi­ness Tax­pay­er Pro­tec­tion Act.” The title is an out­right lie.

About the author

Joel Connelly is a Northwest Progressive Institute contributor who has reported on multiple presidential campaigns and from many national political conventions. During his career at the Seattle Post-Intelligencer, he interviewed Presidents Bill Clinton, Barack Obama, George W. Bush, and George H.W. Bush. He has covered Canada from Trudeau to Trudeau, written about the fiscal meltdown of the nuclear energy obsessed WPPSS consortium (pronounced "Whoops") and public lands battles dating back to the Alpine Lakes Wilderness.

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