The Inflation Reduction Act passed by Senate Democrats last week was rushed through last weekend along party lines, and now that the bill has seen the light of day many Americans are voicing concerns that the IRS will use its massive new funding to go after the middle class.
The bill needed the tie-breaking vote of Vice President Kamala Harris to be passed in the Senate as a budget reconciliation measure. That allowed Senate Majority Leader Chuck Schumer (D-NY) to bypass the legislative filibuster rule that would have required at least 60 votes to advance the bill.
Despite Joe Biden’s promises that he would never allow taxes to be raised on any taxpayer making less than $400,000 annually, an analysis by the Congressional Joint Committee on Taxation shows that the new bill will raise taxes on most Americans making less than that amount.
As part of the legislation’s revenue-enhancement provisions, it allocates $80 billion in new funding for the IRS over the next decade. The allocation is designed to allow the agency to hire 87,000 new agents. That will more than double the agency’s current size.
The hiring of new agents and increased spending is intended to allow the IRS to expand its tax enforcement efforts.
The expansion of the IRS will mean it will have more employees than the Pentagon, FBI, State Department, and Border Patrol combined.
The Congressional Budget Office issued a report that indicates hiring the new agents will result in more than $200 billion in additional federal tax revenue over the next 10 years. More than half of the additional money will come from “enforcement” efforts. That means more audits, “digital asset monitoring,” and other surveillance methods.
The new money allocated to the IRS will increase its total budget more than six times over. The IRS received $12.6 billion in funding in 2021.
The Joint Committee on Taxation also found in its analysis that the majority of additional revenue raised by audits and monitoring will come from taxpayers making less than $200,000 per year. Only between 4 and 9% of the additional revenue will come from earners making over $500,000 per year.
A new survey conducted by the Trafalgar Group shows that 58.5% of Americans believe that agencies like the IRS, EPA, and CDC have “grown too large and only serve their own political interests.”
Only 12% of Americans believe the Inflation Reduction Act will actually reduce the inflation that has been hammering the nation over the last year. Moody’s Analytics issued an analysis of the bill that shows it will reduce the consumer price index by only 0.33% over the next decade.