Bad timing, Annie, you’re probably thinking. I understand. Once you’ve filed your taxes, you really don’t like to think about the IRS at all. Neither do I.
But this year–this tax season–I believe it’s especially important that we spend a little time thinking about what’s just happened…and what didn’t happen…and what may happen to upend all the good.
FIRST, I’ve read no reports of the 87,000 jackbooted, thuggy, heavily armed IRS agents purportedly eager to swoop into our homes and wreak all sorts of damage. They were, according to that conspiracy theory fomented by some Republican lawmakers, hired for nefarious purposes with the new funding the IRS received as a result of the bipartisan Inflation Reduction Act of 2022, a ten-year plan.
What really happened? Newly employed IRS agents sat quietly at their desks answering the public’s phone calls.
SECOND, with all the cynicism and misinformation about government, the Biden administration, and the Democrats, we need to know when government is working the way most of us hope.
In that regard, we have fresh evidence of big improvements in the IRS’s functioning. I find it remarkable how quickly the agency has applied some of that new funding to improve its operations.
Here’s the impact of the work the newly hired IRS agents (sans jackboots and weaponry) accomplished this tax season:
The $80 billion in funding allocated to the agency over ten years was necessary because for years the Republicans have been starving the IRS, resulting in far fewer audits.
Lamentably, the audits that were conducted most often focused on the lowest hanging fruit–struggling Americans using the Earned Income Tax Credit (EITC)–and bypassed the complicated, time-consuming examinations necessary to ensure that the very wealthiest among us paid what they should.
The result, according to the Center on Budget and Policy Priorities, has been a “roughly $600 billion annual gap between taxes legally owed and taxes paid–a gap that disproportionately reflects high income people’s noncompliance with the nation’s tax laws.”
THIRD, President Biden ran on his determination to address the vast economic inequality between poor and middle class Americans on the one hand and the very wealthy on the other. This is a huge issue that has fed into the instability and public disdain for government that threaten our democracy. The Inflation Reduction Act goes far toward addressing that disparity–while, not incidentally, also moving us toward meeting our climate change imperatives.
The graphic below shows the projected positive impact of the additional revenue anticipated over ten years as a result of the legislation.
FOURTH, not surprisingly, those far-right Republicans in control of Congress, who are yelling about how irresponsible the Biden administration has been with this spending, are willing to risk destroying our current economic status to make their phony point by threatening not to raise the debt ceiling.
It isn’t too shocking that the Republicans–who have demonstrated their contempt for government, and certainly want to reduce taxes on the rich rather than increase them–have declared the new $80 billion in funding for the IRS one of the cuts that must be made in any debt ceiling deal.
Reminder: in contrast to Trump’s campaign promise to pay down the nation’s debt over eight years, the debt increased by roughly 25% during Trump’s four years in office–in part due to large tax cuts on the wealthy. But the Republicans had no problem raising the debt ceiling then–three times.
Another reminder: under President Biden, the federal deficit fell by $1.2 trillion in fiscal year 2022. The budget proposal he released in March is designed to reduce the deficit by nearly $3 trillion over ten years (through taxes on businesses and the wealthiest Americans).
Kevin McCarthy’s “budget” includes lots of rollbacks of programs recently passed. The funding for the IRS is a primary target, even though the nonpartisan Congressional Budget Office said rescinding that money would, in fact, increase the deficit by $114 billion through 2032.
McCarthy’s “budget” would also remove tax credits designed to speed us toward green energy, as well as further burdening the poorest Americans receiving benefits. There’s plenty of smoke and mirrors and damage; you can read more in this CNN article.
But that $2 trillion tax cut? Mum’s the word.
Please DO NOT make the mistake of believing that the Republicans are better stewards of economic matters than the Democrats. Over decades, the facts tell us how large that misconception is. Now, they’re being dangerously irresponsible.
In the sharpest of contrasts, the Biden administration is, without fanfare, making government work better–and more fairly. Kinda what we have reason to expect in a democracy, don’t you think?
Annie
annieasksyou... 
Sometimes I think I’m the only person who doesn’t think the IRS is hate-able.
When I made an error in our taxes in, I think, 2008 we got a call from the IRS. I hadn’t claimed an EITC since the first question on that line was about how many dependents we had (none) and the call was from an IRS agent who went over our return and fixed it. Turned out we were eligible even though we had no dependents. (I should have looked at the charts. There was a column for “0 dependents”)
When a local Social Security office manager stole my hubby’s second SSI back pay check, it was an IRS officer who filed on his behalf and at least let us file taxes without paying tax on $50K that we hadn’t received (it had taken 9 years to get to the settlement, so less than $6K per year) It sure would have helped us to get that check, but at least we weren’t stuck paying taxes on it.
When we lost our house and were questioned about the settlement that we eventually received the IRS didn’t argue about the fact that we also lost the documents that showed the equity we lost was less than what we were awarded – they just said thanks for letting us know – then they sent a check refunding the taxes we paid for the 1099-C the year that it happened.
In fact I wonder about people who say they hate the IRS and are serious about it. I contend they are doing something to piss themselves off – underpaying on their taxes and then paying the entire ticket at the end of the year, for example, or coming up with a scam that they get caught at. I fail to understand how Unions can be hostile toward “free riders” but Tax-paying Citizens have no problem with people who don’t want to pay, through taxes, their share for the services government provides.
I propose that instead of being hateful toward the IRS that we reserve our hostility for those who stiff the IRS, the wealthy that you mention in this very article and their pocket politicians who push through budgets that starve the IRS. After all, the IRS represents us, so the wealthy that won’t pay their very affordable tax bills are stiffing us.
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Wow, mdavis, you sure have had some bad luck over the years. Thank you for sharing your perspective; it’s great that you’ve been treated fairly by some reasonable and compassionate government representatives.
Filling out tax forms is no fun, and waiting on hold trying to get help is frustrating—especially for procrastinators (I understand there are many.) So since the new funding seems to be addressing these problems, perhaps the IRS image among the public will change.
I agree with you that there’s not enough anger among Americans who faithfully pay their taxes toward the very wealthy whose refusal to do so burdens the rest of us. One of the biggest problems is that there are so many loopholes written into the tax laws legalizing practices that should not be legal.
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Love the taxman hate the tax! 🙂
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Fair enough—but think of all the nice new infrastructure coming your way.
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There is a saying that taxes are the price we pay for living in a civilized society, and frankly I wouldn’t mind paying for a bit more civilization around here.
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Yes, Infidel. I agree with both Justice Holmes and you.
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There is a top of the line MIG fighter jet here at the AF Museum. I like it’s story of how it ended here clean and shinny and decked out. It has a lot to do with the gun culture in the US and too much money. A Florida businessman bought it from a Russian tank commander who needed rations instead of air cover. It made it’s way unmolested to a custom shed in Ft Lauderdale, when a custom agent thought to ask if individuals could legally own one. He donated it. I don’t mind paying my taxes if I’m not dead but I always thought that $115 million dropped from a Cessna would be a better use of my tax dollars than an
F-35B. Bombs don’t kill poverty money do.
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That’s a good story, Richard, and of course I agree with your concluding sentiment—*except* I recently read about a guy wreaking havoc in Oregon by throwing $200,000 in $100 bills out the window of his speeding car. Apart from the fact that he deprived his family of their life savings (different scenario in that regard), he might well have gotten people killed as they left their cars and ran into traffic.
But you were probably speaking metaphorically—right?😏
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Was the guy in the car a politician? Their class seems prone to be reckless with other people’s money. 🙂
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A working government? Reasonable to expect — yes. But here, you give us the facts at least on this one agency — so thank you . . . especially with Biden’s announcement of another run.
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You’re welcome, Denise!
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Making mega-and-MAGA billionaires tax exempt —
One more reason the GOP is beneath contempt!
But now that their free ride is over and done,
It doesn’t mean the long game is won.
Republicans will never cease trying to please their rich cronies
No matter how much they’re called out as shameless phonies.
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My thanks, mm, for taking the time
To compose your comment here in rhyme.
Alas! You’re right: it’s all too true;
The Rs find taxing the rich taboo.
But fairness to those of us who care
Means demanding they all pay their damn share!
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Thanks for a balanced perspective!
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Thank you, JoAnna! I don’t hide my biases.
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Good post, my friend! I applied for a job with the IRS right out of college, but was turned down … they said I was “too nice.” I also applied for a job with the CIA and was turned down … no reason given! So, I went to work as an accountant for an air-conditioning manufacturer. But, I digress …
The Republicans seem to envision a world with no climate regulations, no restrictions on corporations and the wealthy, and a return to a time when women, Blacks, Asians, Hispanics and others were not fully recognized as humans, let alone citizens. I’m all for opposing viewpoints, a healthy dialog, compromise, etc., but there can be no compromise with today’s Republican Party … it’s all or nothing at all for them. Wealth inequality is one of the top five problems in this nation, and one that is NOT being addressed, largely because those wealthiest have bought and paid for enough members of Congress to have their way. Let us hope that changes soon.
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Thanks, Jill. Interesting digression—strange the twists and turns our lives take. I do share your belief that we need healthy dialogue and compromise but can’t expect them from today’s Republicans. But I differ about wealth inequality not being addressed. That’s part of the goal Biden stressed when urging passage of the Inflation Reduction Act, including the IRS funding for more effective tax collection and increases on taxes of those earning more than $400,000 a year. Now we must fight to prevent the disloyal opposition from taking those steps toward equity away!
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Annie, great post, although some may not see the importance. A couple of comments based on recent history and the context of being a former Republican, Democrat and now independent voter.
A lot of the heightened IRS bashing from the right about ten years ago came in when there was a flood of requests by newly created entities seeking tax exempt status, many from right leaning organizations. The IRS has centers of excellence that handle specific type of queries to benefit from the working knowledge. When a number of these tax exempt requests were denied, a ruckus was raised as if something untoward was happening. It was not. Many of these requests should have been denied. But, that became the exaggerated issue of the day for Republicans creating an even bigger bogeyman of the IRS.
Also, being a Republican for twenty plus years, I can say this with seriousness of purpose. Most of the Republican voters are voting against their own economic interests and have no idea they are. The party has a lot of these contrived, exaggereated and hyped up issues to appeal to their base. But, what the party does not tell their members is at the heart of their party is a mission of giving more money to rich people and helping them keep it. This is why Trump’s White House cut into the IRS and why conservative judges are so critical to rule in favor of corporations sued in class actions.
A well-funded IRS hits at the heart of rich people keeping money as the majority of aggressive tax payers are playing with larger dollar numbers. All of the above sounds so conspiracy minded, but sadly it is true. This is a key reason the Trump tax law benefitted the wealthy and corporations with the middle class seeing some tax increases with state and local tax deduction limitations.
Keith
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Hi, Keith. Thanks for this thoughtful comment. Much appreciated. I think the Republicans’ hatred of taxes goes way back. Remember what happened to George HW Bush when he said, “Read my lips: No new taxes.” And Grover Norquist’s anti-tax, anti-regulations presence has long been guidance for much of the Republican Party. He recently appeared on Fox News to talk about the IRS and foreshadowed his appearance with a tweet that what he had to say “won’t be pretty.”
Even more worrisome, I fear, is that we have a House run by elected officials who lack a basic understanding of economics—and governing—and really don’t care enough to learn the most rudimentary information about both.
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Annie, Norquist took a position then made it a trial of candidacy. If one did not sign his paper, he would muster everything against you. No one likes to pay taxes, but at some point we have to pay for things. As for your final point, I agree. Congress used to have some people who were students of economics and governing – Bill Bradley, Jack Kemp, Phil Gramm, e.g. Now, due to gerrymandering, we allow folks who shout at the wind get in. Keith
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Thank you!
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I agree with those who don’t mind paying a bit more taxes for better services – at the same time, I wish the taxes we already pay are well spent
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I think the Biden administration is working hard to move things in a more people-centered direction, da-AL.
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Every Democratic administration does that. The progress they make depends on how much Republican ballast and resistance there is.
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Too true, mdavis. But as I’ve written before, I’ve felt since Biden first described his vision that it could be transformational. If it hadn’t been for the Republicans and Manchima, the family-friendly portion of “Build Back Better” would have passed, providing major support for so many Americans.
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sad 😦
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Cinda, I thought this was a hopeful post. Would you care to tell me what you found sad?
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IRS agents purportedly eager to swoop into our homes and wreak all sorts of damage…. according to that conspiracy theory “…”Republicans have been starving the IRS”…”bypassed the complicated, time-consuming examinations necessary to ensure that the very wealthiest among us paid what they should.” etc. That’s what I meant, but sorry, I guess I should not dwell on the negative in a positive post!
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I understand. Thank you for clarifying.
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