Inflation Reduction Act: Would New IRS Tax Enforcement Target the Middle Class?
Summary from the AllSides News Team
Democrats’ Inflation Reduction Act aims to raise $200 billion over the next decade by helping the IRS increase tax enforcement and close loopholes. Will it work, and will it avoid targeting the middle class?
The IRS has long requested additional funds to modernize its outdated technology and add to its shrinking workforce; in April, IRS Commissioner Chuck Rettig said the 2022 tax season was “unlike any other” due to these challenges. Responding to these requests, the Inflation Reduction Act includes almost $80 billion for the IRS — potentially nearly doubling the average yearly IRS budget through 2031. Democrats say the increased tax enforcement will target big corporations and the wealthy, but a report released by House Republicans said it would result in over 700,000 more audits of people making less than $75,000 per year.
While the IRS said its increased enforcement would not target small businesses or the middle class, voices from the right were broadly skeptical, often pointing to a Treasury Department proposal to hire 87,000 IRS workers over the next decade. Rep. Jason Smith (R-Mo.) said the increased IRS enforcement would force “hardworking Americans” to “live in fear” of audits.
Perspectives from the left were less common and tended to defend the bill; an AP (Lean Left bias) fact check said Republicans were “distorting” the bill by making claims that were “not supported by what is in the legislation.”
Featured Coverage of this Story
From the Center
With the IRS hiring more employees, here’s who agents may target for auditsAs the Democrats’ spending plan moves closer to a House vote, one of the more controversial provisions — nearly $80 billion in IRS funding, with $45.6 billion for “enforcement” — has raised questions about who the agency may target for audits.
IRS Commissioner Charles Rettig said these resources are “absolutely not about increasing audit scrutiny on small businesses or middle-income Americans,” in a recent letter to the Senate.
However, with the investment projected to bring in $203.7 billion in revenue from 2022 to 2031, according to the Congressional Budget Office, opponents say IRS enforcement may affect...
From the Left
Hyperbolic GOP claims about IRS agents and audits“Do you make $75,000 or less? Democrats’ new army of 87,000 IRS agents will be coming for you — with 710,000 new audits for Americans who earn less than $75k.”
— House Minority Leader Kevin McCarthy, in a tweet, Aug. 9
With a vote scheduled Friday in the House on the big spending package approved in the Senate, the GOP has focused its fire on provisions that would bolster the Internal Revenue Service with new funding to crack down on tax cheats.
But these numbers are a misfire, lacking significant context....
From the Right
How Democrats' beefed-up IRS could hurt low-income AmericansThe newest health care and climate spending bill from Democrats includes an $80 billion boost to the Internal Revenue Service that is intended to help the agency crack down on wealthy tax cheats. However, Republican critics say that a bigger IRS could ultimately hurt lower-income Americans.
Providing the IRS with an influx of funding has been a top priority for President Biden. It has emerged as one of the most prominent financiers of the Inflation Reduction Act that Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.Va., unveiled last week.
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