The Real IRS Scandal
The lead editorial in Sunday’s New York Times explains what the real scandal is at the Internal Revenue Service, and it has nothing to do with Tea Party groups or Lois Lerner.
No, the real scandal is what Republicans did to cripple the agency when virtually no one was looking. Since the broad Tea Party-driven spending cuts of 2010, the agency’s budget has been cut by 14 percent after inflation is considered, leading to sharply reduced staff, less enforcement of the tax laws and poor taxpayer service.
As the economist Jared Bernstein noted recently in The Washington Post, a weakened I.R.S. enforcement staff will be unable to make a dent in the $385 billion annual gap between what taxpayers owe and what they pay — an unintended tax cut, mostly for the rich, that represents 11 percent of this year’s spending. Middle-class taxpayers who struggle to fill out their 1040s may welcome a diminished threat of an audit, but in fact this reduction is not about them. The I.R.S. audits a far higher percentage of tax returns from people reporting incomes over $200,000 than from those reporting less, because that is where the money is (along with the most profitable cheating).
Audits are down, because it costs money to do them; but more money is made back, as $6 is returned for every dollar it costs. But that doesn’t sit well with the right, which would rather protect those who are the primary targets of audits: rich people. And theyk want further cuts.
…rather than meet their legal responsibilities, House Republicans have proposed cutting I.R.S. funding by yet another $341 million in 2015, to $10.9 billion. (Their bill also would outlaw the agency’s collection of the health law’s individual mandate penalty.)
President Obama’s budget, by contrast, would increase the agency’s spending by $1.2 billion compared with this year’s — not nearly enough, but at least a start in reversing a troubling trend and letting the I.R.S. do its job of collecting the money to pay for essential government services.