It Sounded Like a Great Idea In Theory
Bubba
09 Sep
Republican skepticism about how much additional revenue could be raised from heightened IRS tax enforcement is looking pretty justified. (National Review)
National Review Institute fellow Dominic Pino:
After lots of hemming and hawing, Democrats finally got their huge boost in IRS funding in the so-called Inflation Reduction Act in August 2022. This $80 billion boost over ten years was supposed to help to “close the tax gap” by improving IRS enforcement to collect money taxpayers owed but were not paying. This would not increase the audit rate on taxpayers making below $400,000, the Treasury promised. The target was those evil rich guys sitting on piles of money.
The claim: In April 2021, the Biden White House estimated the additional IRS funding would bring in $700 billion over 10 years through increased enforcement.
The Treasury Department echoed the administration’s projections a month later.
The reality: In the two years since the IRS stepped up its auditing efforts on wealthy taxpayers, the agency collected $1.3 billion from the initiative, which is far off the pace required to reach $700 billion in a decade.
Bubba’s Two Cents
The takeaway: be skeptical of utopian promises. Politicians often make bold claims to sell their policies, but the reality is usually messier. Instead of a revenue-boosting, deficit-cutting project, we’ve ended up with another costly government expansion.