No, He Will Bite
Despite the GOP’s scaremongering – it is election season, after all – the provisions with the Dems’ Orwellianly named Inflation Reduction Act to grant the IRS nearly $80 billion in new funding in order to, among other things, hire 87,000 new employees, won’t dramatically effect anyone in the next few years. Many of these “new hires” will simply be replacements for the current staff, approximately half of whom are at or approaching retirement age.
But, there’s no more truth or accuracy in the Dems’ claims that the middle-class and small businesses won’t experience greater scrutiny and/or audits. When the stated goal of increasing the IRS’ budget is to increase collections by $204 billion, you can be sure that the IRS is going to target anyone and everyone that they can. You can also be sure that the “Billionaires” and “Megacorporations,” most or all of whom have more and better tax attorneys than the IRS ever will, won’t be the IRS’ primary targets or the major sources of that $204 billion in extra tax collections.
Understand that approximately 50% of the largest corporations in America are already audited each year. Admittedly though, this is down from 100% of them during the Obama Regime. And yet, the Dems want to increase tax collection by $204 billion.
The largest corporations in the United States with over $20 billion of assets have had their rate of audits go from nearly 100% to 50%. Among wealthy individuals who had a positive income of a million dollars or more, the audit rate fell from 8.4% in 2010 to 2.4% in 2019.— Janet Holtzblatt
Senior Fellow, Urban-Brookings Tax Policy Center
But, simply put and much to the chagrin of Dems and their IRS, 38% of those audits fail to find any way to take more of these people’s and corporations’ money than they had agreed to pay.
No; their dog isn’t going to bite the “rich.” He will bite other people instead.
So, that fairly massive increase in tax collections is going to have to come from somewhere and somebody else. And it’s not going to be just the 1% either, since returning to Obama era audit rates for all individuals making over $400,000 would generate only 28%, or $9.9 billion of that expected $204 billion. And, even if the IRS increased audit rates 30x for taxpayers making over $400,000 and to a 100% audit rate upon taxpayers with incomes over $10 million, this would only raise to approximately $28 billion of it.
No, the IRS has a long and ongoing to this very day history of targeting the poor’s – those with $25K or less in income – tax returns for audits at a rate of 5x that of all other groups combined. I would expect that this rate would normalize somewhat… because the rates of audits will dramatically increase for those making between $26K – $200k per year and for most small-to-mid sized businesses, bringing them closer to what the poor suffer from.
It’s simple math and pragmatism. The IRS wants or needs to show increased collection and the poor and the middle-class through the 2%’ers are the ones without the resources to combat the IRS. And, there’s 100s of millions more of us. Of course we’re the ones who will be targeted by the IRS the most overall.
So yeah, the Democrats’ junkyard dog, the IRS won’t bite many now. But, it will most likely do so in 2026 and 2027 if it isn’t put down before then.
Tags: Democrats | Economics | IRS | Lies | Politics | Taxes | Theft