The White House made its first veto threat of the new Congress Monday, targeting a House Republican bill that would rescind funding allotted to the IRS in the Inflation Reduction Act, which President Joe Biden signed into law last summer.
“This reckless bill would increase the deficit by nearly $115 billion over 10 years per an estimate by the Congressional Budget Office by enabling wealthy tax cheats to engage in additional tax fraud and avoidance,” the administration said in a statement, citing the score released Monday.
“If the President were presented with H.R. 23 — or any other bill that enables the wealthiest Americans and largest corporations to cheat on their taxes, while honest and hard-working Americans are left to pay the tab — he would veto it,” it added.
Such a bill, should it pass the House, would almost certainly never survive the Democratic-controlled Senate to reach Biden’s desk.
Republicans of all stripes, from Rep. Lauren Boebert (R-CO) to Sen. Chuck Grassley (R-IA), have latched on to a baseless conspiracy theory centered on the IRS funding. They claim that the money will be used to hire 87,000 armed IRS agents to kick down the doors and threaten the lives of middle class Americans.
“Are they going to have a strike force that goes in with AK-15s already loaded, ready to shoot some small-business person in Iowa?” mused Sen. Chuck Grassley (R-IA) on Fox and Friends last summer.
It’s a talking point fully untethered from the reality of the Inflation Reduction Act. The 87,000 figure comes from an old Treasury Department report, issued before the Act became law, estimating the number of full-time employees the IRS would be able to hire by 2031 with an $80 billion infusion. Much less than funneling new funds to a supposedly rabid group of IRS agents who habitually terrorize gentle Iowans, that money would be used to hire employees spread across the agency, many in functions like customer service.
Just over 2,000 IRS employees are armed agents, according to 2021 agency data. They often work with other law enforcement entities when tax crimes overlap with other misconduct.
Treasury Secretary Janet Yellen has also instructed the IRS not to use the new funding to boost audit rates of businesses or households making less than $400,000 a year.
But the Republican animosity towards the IRS is nothing new. Through hearings and ginned-up scandals, the party has been aiming at the agency for decades with tangible results. The cumulative effect is an agency understaffed, using hopelessly outdated technology, that completely lacks the resources and firepower to go after top earners, many of whom hide their money and assets behind accounting trickery and batteries of lawyers.
As the White House points out in its statement — and as other, independent analyses have also noted — that means billions of dollars in uncollected taxes owed to the government.
“Each year the top one percent hides about 20 percent of their income from the government so they can get away with not paying any tax on it,” it said. “That means that working people – who report 99 percent of their income to the IRS – pay a larger share of collected taxes than they should.”
