Underfunding IRS Helps Wealthy Avoid Paying Taxes

Shutterstock | Rob Crandall

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Thousands of the Internal Revenue Service’s “essential” workers will be required to work without pay during the ongoing government shutdown. With the IRS already underfunded under normal circumstances, these workers that have been called back in an effort to keep the tax refund season running smoothly will likely be even more overwhelmed. For millionaires and billionaires, this is great news.

While most Americans don’t have any special love in their hearts for the IRS, almost everyone is better off if this important agency has the resources it needs to properly do its job. But for wealthy Americans, there is a tangible benefit to keeping the IRS underfunded and limping along.

Compared to 2010, IRS enforcement funding for 2018 is down 23% when accounting for inflation. This is entirely due to Republicans in Congress slowly but consistently cutting funding for the agency over the years in a way that has for the most part not attracted attention, until now. The outcome, a multi-year trend of fewer and fewer audits of mostly wealthy individuals and large corporations, is great for Americans looking to get away with paying less, or zero, taxes at all without facing repercussions.

Given Republicans’ preoccupation with changing our tax code in favor of the wealthy and corporations, this is clearly deliberate. They know the donor class is happier when IRS enforcement is lax, and are pleased to play a part in it by underfunding the agency. As a result, the IRS has received $1.5 billion less in funding this last year, at a cost of at least $18 billion in lost tax revenue.

So, if you’re wondering why the party that always asks for pay-fors when it comes to social services like Medicaid and food stamps that their constituents rely on is not more concerned with making the agency responsible for federal revenue as efficient as possible, that’s why. They don’t care about the deficit, they care about limiting social services so that they can curb how much wealthy people pay in taxes.

 


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