/Biden’s push to bulk up the IRS includes a lot of big numbers (but no mention of the spending)
Biden's push to bulk up the IRS includes a lot of big numbers (but no mention of the spending)

Biden’s push to bulk up the IRS includes a lot of big numbers (but no mention of the spending)


Biden's push to bulk up the IRS includes a lot of big numbers (but no mention of the spending)

By John Sexton | HotAire.com

Yesterday, President Biden tweeted out a stat about the amount of taxes the top 1% are not paying:
Also yesterday, the NY Times published a story which opened with the same big number plus some more, even bigger numbers.
The wealthiest 1 percent of Americans are the nation’s most egregious tax evaders, failing to pay as much as $163 billion in owed taxes per year, according to a Treasury Department report released on Wednesday.
The analysis comes as the Biden administration pushes lawmakers to embrace its ambitious proposal to beef up the Internal Revenue Service to narrow the “tax gap,” which it estimates amounts to $7 trillion in unpaid taxes over a decade. The White House has proposed investing $80 billion in the agency over the next 10 years to hire more enforcement staff, overhaul its technology and usher in new information-reporting requirements that would give the government greater insight into tax evasion schemes.
As the Times points out, all of this is part of a Biden administration push to bulk up the IRS by spending $80 billion on new staff and new technology. The big numbers ($163 billion and $7 trillion) are meant to convince you this is an effort to bring in a very serious amount of money. But it’s all a bit misleading.
The $7 trillion over a decade is the total estimate of unpaid taxes by all Americans, from the very bottom of the income scale to the top. President Biden has promised not to do anything to those outside the top one percent or so, which means there’s no chance of getting most of that money from taxpayers. All we’re really talking about is the $163 billion not being paid by the top 1 percent.
Of course that still sounds like a fair amount of money, especially if you add it up over ten years, but Biden’s actual plan doesn’t claim it can recoup all of that. In fact, the amount the government hopes to pull in by bulking up the IRS is quite a bit less: [emphasis added]
The Administration’s proposals call for significantly increasing the IRS budget, specifically $80 billion of investment over the coming ten years in enforcement, IT, and taxpayer services generating an estimated $320 billion in additional tax collections over the next ten years.
To further ensure that everyone pays their fair share, the Administration also calls for using information that financial institutions already possess—without imposing any burden on taxpayers whatsoever—so the IRS can deploy these additional resources to audit more sophisticated tax evaders. These changes to the third-party information reports are estimated to generate $460 billion over a decade.
So after spending $80 billion we’ll bring in an additional $780 billion over 10 years for a net gain of $700 billion. Well, maybe.
In the final paragraph of the NY Times story, they mention that the CBO just scored the portion of the bill that would supposedly bring in the extra $320 billion over 10 years. But the CBO estimate was somewhat different: [emphasis added]
CBO has completed its analysis of another proposal in the President’s budget, an increase in spending for the Internal Revenue Service’s (IRS’s) enforcement activities. CBO estimates that portions of the Administration’s proposal to increase funding for the IRS by $80 billion over the 2022–2031 period would increase revenues by approximately $200 billion over those 10 years.
Again, the CBO didn’t look at the other portion that is supposed to generate $460 billion over 10 years. Is that estimate off by a similar amount? We’ll have to wait and see what the CBO says.  But for now if we take the CBO estimate of one part of the plan and combine it with the Biden admin estimate of the other part, the idea is to spend $80 billion bulking up the IRS to hopefully bring in $660 billion over 10 years, for a net gain of $580 billion.
$580 billion over a decade or less than $60 billion a year doesn’t sound like much when you consider the Biden administration and Democrats in Congress have already passed a $1.9 trillion American Rescue Plan earlier this year. Then there’s the $1.2 trillion American Jobs Plan which is pending in the House while Democrats argue over another $3.5 trillion mega bill.
Assuming all of this gets through (which it may not thanks to Joe Manchin), we’ll have spent about $6.6 trillion this year. That’s about 11 times what the IRS hopes to squeeze out of the top 1% over the next decade.
It’s an ongoing problem with Democrats who shout about making the 1% pay their fair share. They never really mention that even if the 1% paid every penny they owed and then some it wouldn’t come close to paying for what those same Democrats are spending.
I really don’t expect the president to tweet out that his plan to bulk up the IRS is barely going to make a dent in his spending but I wish the NY Times would point it out when they publish stories about this topic.
Original Source