When the sweeping Inflation Reduction Act neared passage in 2022, Republicans homed in on a provision they hoped the public would find especially terrifying: an $80 billion increase in funding for the Internal Revenue Service. This, they claimed, would create a new army of jackbooted government thugs fanning out across the land to terrorize law-abiding taxpayers. “Are they going to have a strike force that goes in with AK-15s [sic], already loaded, ready to shoot some small business person in Iowa?” asked Sen. Chuck Grassley, R-Iowa. The bill, claimed Sen. Ted Cruz, R-Texas, “will create 87,000 new IRS agents to target regular, everyday Americans.” Not even your child’s lemonade stand would be safe.
Democrats countered that no, none of that would happen. Instead, the money would upgrade the IRS’s creaky systems, improve customer service and allow the agency to do a better job of collecting unpaid taxes — more specifically, those of wealthy scofflaws. That would not only create a fairer tax system, it would raise lots of revenue, helping to reduce the deficit.
The results are coming in, and you’ll never guess who was right.
Republicans have not let up in their efforts to prevent the IRS from getting more efficient and effective at its job.
This week the Treasury Department released the results of one small corner of the IRS’ new enforcement efforts: a program going after 1,600 delinquent taxpayers with incomes of over $1 million a year who owed more than $250,000. “The tax bill wasn’t even in dispute — the taxes were clearly owed by these people,” said IRS Commissioner Danny Werfel, “but we didn’t have the people or the resources” to collect, until now. That one initiative, involving just “dozens” of employees, has brought in over $1 billion in revenue.
No wonder Republicans are furious. They spent years slashing the IRS budget, making the agency a target of abuse and leaving it struggling with outdated equipment, inadequate staff and little ability to take on wealthy tax cheats with armies of lawyers and accountants. The result was not only bad customer service, but hundreds of billions of dollars every year in uncollected taxes. As far as Republicans were concerned, that was a win-win: Not only would the wealthy and dishonest be rewarded and fewer resources be available for government programs, government itself could be portrayed as incompetent and frustrating.
But now things are changing — even though Republicans have not let up in their efforts to prevent the IRS from getting more efficient and effective at its job. In recent budget negotiations, they demanded that the IRS budget increase in the IRA be clawed back. They were partially successful: Faced with GOP threats to force a default on America’s debts, Democrats agreed to reduce the original $80 billion in funding to $60 billion.
Nevertheless, the IRS has already made enormous gains with the IRA money the agency has received. Anyone who called the IRS for assistance when doing their taxes this year probably already knows, because after the passage of the IRA, the average wait time on the IRS help line plummeted from 28 minutes to just three minutes. And according to the latest Treasury estimates, the funds provided by the IRA will produce hundreds of billions of dollars in additional revenue over the next decade.
That’s because better enforcement brings in more revenue from both the past and the future. Consider a rich tax cheat who suddenly finds himself audited. Not only will he have to pay the taxes he already owes, but after going through the experience, he’s far less likely to fudge his tax returns in years to come. And as others learn that it’s harder to get away with evading taxes than it used to be, many who might have said, “I’m not going to get caught if I cheat” decide not to take the risk. So the IRS has both recovered lost taxes and prevented future losses.
If you pay your taxes like most Americans do, Trump thinks you’re just a sucker.
Put it all together and we get more efficient government, a fairer tax system, a more pleasant tax filing experience and a lower deficit. The only way anyone could object is if they want government to work poorly. Who might that describe?
Not surprisingly, Project 2025 — the plan concocted by Donald Trump’s allies to turn the federal government into a right-wing authoritarian version of itself — includes a vociferous condemnation of the money allocated for the IRS in the IRA. “The Inflation Reduction Act contains a radical $80 billion expansion of the IRS — enough to double the size of its workforce,” the document reads (though that’s false: the funding enables an increase in staffing, but nowhere near a doubling). “Unless Congress reverses this policy, the IRS will become much more intrusive and impose still greater costs on the American people.”
Those millionaire tax cheats no doubt find paying their fair share quite “intrusive.” So might Donald Trump himself. You may recall that in one of their 2016 debates, Hillary Clinton said that one possible reason Trump refused to make his tax returns public (as every other presidential candidate does) was to avoid revealing he paid nothing in federal income taxes. Trump interrupted to say, “That makes me smart.”
In other words, if you pay your taxes like most Americans do, Trump thinks you’re just a sucker. That’s what a lot of the wealthy people who decide not to contribute to the country that made them rich think, too. But they’re a little less likely to get away with it than they used to be. At least for now.
