Monday, March 04, 2024|
Share this story
In an analysis released this week, the Internal Revenue Service and the Treasury Department admitted that they had been wrong with an earlier estimate of $390 billion in additional tax revenues coming in during the next decade as a result of the $80 billion IRS funding boost in President Biden’s Inflation Reduction Act, passed in 2022.
They didn’t undershoot; it turns out, the additional revenue is likely much higher, climbing to around $561 billion between 2024 and 2034 when factoring in not only additional enforcement but other benefits of the expanded capacity, which Republicans had of course stringently opposed.
There’s something a little bit ironic about the GOP legislators who are claiming with a straight face that Donald Trump simply cannot be prosecuted for his many sustained efforts to subvert the 2020 election — efforts that, remember, included strong-arming state electoral officials and discussions of invoking the Insurrection Act to deploy troops on American streets — insisting that more IRS agents was tyranny.
Increased revenues will be presented as extracting more taxes from the public, but that’s disingenuous for at least four reasons. One, none of these are additional taxes; they are the taxes that were already owed and that wealthier people were often not paying, knowing that accounting tricks and the under-resourced IRS would insulate them from ever having to pony up. Two, the vast majority of these increases are not being drawn from struggling families or low-income taxpayers but from those well-to-do people who owed much more but paid much less.
Three, this analysis isn’t just about tax cheats and the benefits of enforcement; it specifically notes that it is incorporating additional revenues from technology that makes compliance easier, as well as the “nudge” towards compliance that the specter of additional enforcement brings. Four, this isn’t about milking a decrepit economy for more government revenues; the economy is booming in defiance of many dire predictions.
Elected officials will mostly at least pay lip service to the idea of some return on public investment, and it’s hard to argue with an $80 billion down payment producing an almost half-trillion-dollar return even after paying for itself. This isn’t just a question about scoring political points, this is real money that can be used for concrete public purposes — more infrastructure, green energy incentives, transit projects, whatever.
That House Republicans are obsessed with stripping the IRS’ expanded funding away, having clawed back as much as $21 billion in future disbursements from the IRA’s historic investment, gives away the game that they’re quite uninterested in the rich paying their taxes. Simultaneously, they’re fretting about an increasing federal deficit, willfully ignoring the connection between that and decreased tax revenues.
Instead of shying away from taking credit for an expanded IRS, Democrats should own it and communicate to the public just why this is an excellent deal. People might have a negative knee-jerk reaction to the idea of federal tax agents collecting Uncle Sam’s cut, but it sounds a lot better when you frame it as the rich subsidizing everyone’s child care and housing, building roads and softening the financial impact of medical emergencies.
Put that all forward, and let the GOP tie itself in knots explaining why a multi-millionaire should pay nothing in federal taxes instead.
—New York Daily News Editorial Board/TNS
Your email address will not be published. Required fields are marked *