The unbiased Congressional Budget Office projects that the removal of additional IRS funding will increase the deficit by more than $114 billion over the next decade.
WASHINGTON. Republicans in the House of Representatives began their majority tenure on Monday by passing legislation repealing nearly $71 billion that Congress provided to the IRS, fulfilling a campaign promise, even though the legislation is unlikely to move any further.
Democrats have beefed up the IRS over the next decade to help offset spending on the top health and environmental priorities they passed last year and bolster an agency committed to providing basic services to taxpayers and ensuring fair tax compliance.
Money beyond what Congress provides annually to the IRS through the appropriation process, and immediately became a magnet for GOP advertisements in the fall, claiming that the raise would lead to an army of IRS agents chasing hard-working Americans.
The bill to abolish money passed the House of Representatives along party lines by a vote of 221–210. The Democratic-controlled Senate vowed to ignore it.
Shortly before the vote, the non-partisan Congressional Budget Office projected that the removal of additional IRS funding would increase the deficit by more than $114 billion over the coming decade. This created an awkward moment for Republicans, who said addressing the deficit would be one of the major concerns of the majority. It was an early example of how the Republican Party’s bold campaign promises can get tangled up in the messy reality of governance.
However, the CBO forecast did not seem to dampen Republican support. Rep. Jeff Duncan, RS.C., said the additional IRS funding provided by Democrats last year was for one purpose.
“To reach small businesses, hardworking Americans to try to raise money for reckless spending, reckless spending that has left this country in debt of $31 trillion,” Duncan said.
Duncan and other GOP lawmakers routinely say the extra funding will be used to hire 87,000 new agents to fight the Americans, but that’s a misconception. This number is based on the Treasury Department’s plan, which says many IRS employees will be hired over the next decade if it gets the money. But not all of these employees will be hired at the same time, not all of them will be auditors, and many of them will replace some 50,000 employees who are expected to leave or retire in the coming years.
“This IRS debate represents the most dishonest demagogic rhetoric I have ever seen in Congress,” said Rep. Steny Hoyer, MD.
Charles Rettig, a former IRS commissioner, said in his last letter to the agency in November that the extra money would help in many areas, not just increased tax oversight. He said the investment would make it “even less likely that honest taxpayers will hear from the IRS or get an audit letter.”
The agency’s additional funding has been politically controversial since 2013, when the Obama administration’s IRS was found to have used inappropriate criteria to screen tea party groups and other organizations applying for tax exemptions.
In subsequent years, the IRS has largely been defeated in Congressional funding struggles, even though a subsequent 2017 report found that both conservative and liberal groups were selected for review.
In April, Rettig told lawmakers that the agency’s budget had shrunk more than 15% over the past decade, adjusted for inflation, and said the number of full-time employees – 79,000 in the last fiscal year – was close to 1974 levels.
But Rep. Nicole Malliotakis, RN.Y. and other Republicans did not believe the argument that the funding would go to audit the rich.
“This is meant to hoard money, check and go after small businesses and families in America that they know cannot afford the legal fees to fight this army,” Malliotakis said.
Senator Ron Wyden, Democratic Senate Finance Committee chairman, said a decade of Republican-led budget cuts gutted the IRS.
“The only way Republicans in the House of Representatives can make it even more obvious that they are doing a favor to wealthy tax scammers is to come out and say it in those terms,” Wyden said. “This bill will get nowhere in the Senate. ”
And the White House said that President Joe Biden would veto the bill if it hit his desk, saying that the richest 1% of Americans hide about 20% of their income so they don’t have to pay taxes on it, shifting most of the tax burden on the middle class.
“In their first economic bill of the new Congress, Republicans in the House of Representatives are making it clear that their top economic priority is to allow wealthy and multi-billion dollar corporations to avoid paying taxes, while at the same time making life difficult for ordinary middle-class families who pay taxes. they owe,” the White House said.