The Biden Administration is reportedly looking to add some more teeth to the IRS, per insider reports. According to the Washington Post, Administration officials speaking on conditions of anonymity have expressed this new tax plan would be sweeping. It’s expected to be included in Biden’s American Families Plan, a huge spending bill the president is expected to unveil before Congress on Wednesday.
The American Families Plan will reportedly dedicate billions of dollars to universal pre-kindergarten schooling, family leave and sick time, and childcare. In the wake of the damage done to the economy in 2020, the Biden Administration has expressed a desire to move quickly and deal out huge bills sooner rather than later.
How to Pay for It
As with any huge spending bill proposed by Democrats, Republicans are sure to ask “how are you going to pay for that?” And, ready to answer, Biden will be pointing to the IRS’s collection of delinquent taxes. According to insiders, the president plans to ramp up enforcement of IRS rules by arming the agency to track down outstanding tax bills.
The enforcement crackdown reportedly will focus, primarily, on the wealthiest earners in the US. The IRS itself is at the end of a decade of budget cuts that have left it reportedly under-equipped to do its job. Agents within the IRS have noted that their equipment is aging, their computer system is ancient, and they simply don’t have the resources to go after every outstanding tax bill.
The Budget Shortfall
According to IRS Commissioner Charles P. Rettig, who spoke to Congress earlier in April, there could be as much as $1 trillion annually going uncollected by the IRS. With more funding, more agents, and updated technology, the agency would be able to collect the money needed to power Biden’s ambitious spending bill.
Republicans are unlikely to be happy with this plan. Empowering the IRS to better collect taxes from the wealthiest Americans is directly counter to Republican messaging regarded as “job creators”. Republican Congresspeople have described Biden’s ambitious programs as “socialist” in nature, and have characterized empowerment of the IRS as an unwarranted tax hike on the American people.
However, increasing the power of the IRS is popular among most of the factions within the Democratic Party. Indeed, to fund ambitious social projects, the federal government’s money collector needs to be able to collect money. Should Republicans dislike this plan, then they should turn their efforts toward winning Congressional seats in 2022. Elections do have consequences, after all.