The Next Republican Trifecta Needs to Finish the Job and Repeal the New IRS Funds

O n Saturday, newly minted House speaker Kevin McCarthy promised, “Our first bill will repeal funding for 87,000 new IRS agents, because the government should be here to help you, not go after you.” On Monday night, House Republicans made good on that pledge. Caroline Downey reports:

On Monday night, the new GOP-dominated House voted to rescind more than $70 billion in funding for the Internal Revenue Service, threatening to kill the Biden administration’s plans to dramatically expand the tax-collection bureaucracy.

The measure succeeded with 221 Republicans voting in favor and 210 Democrats opposing. Spearheaded by Representatives Adrian Smith (Nebraska) and Michelle Steel (California), the bill targets the massive amounts of money allocated to the IRS in the deceptively named Inflation Reduction Act. . . . The Inflation Reduction Act funneled $80 billion to the IRS over ten years with only about 4 percent of the money going to taxpayer “assistance” and the bulk going to pay for tax investigations and new positions, the GOP alleged.

But as Caroline notes, the GOP bill “next goes to the Senate, which is narrowly controlled by the Democrats.” Every Senate Democrat backed the Inflation Reduction Act with the original IRS provisions, so it’s unlikely to make it through the upper chamber, especially now that Democrats have a clear majority rather than a 50-50 split. (Kyrsten Sinema’s recent departure from the party doesn’t change the fact that she also voted for the Inflation Reduction Act.) And even if the GOP bill did somehow clear the Senate, it would arrive on Joe Biden’s desk, where the president would almost certainly veto the attempt to repeal a key provision of his administration’s signature legislative achievement.

In other words, the proposed repeal of the 87,000 new IRS agents — a massive legion of employees who will almost certainly be sicced on the American middle class — is a good messaging bill. The House GOP is doing what an out-of-power party with control of only one chamber of Congress should do: pass bills that broadcast the party’s political priorities, even though the bills have little chance of becoming law, and provide substantive examples of what their agenda would look like if voters gave them full control of the federal government.

But if the GOP does win back the Senate and the White House in 2024 or later, it must not forget this initiative to repeal IRS funding. In the flurry of excitement that would follow a trifecta victory, undoing the Biden administration’s disastrous expansion of an already-weaponized agency should move beyond this week’s dead-on-arrival bill passed by the new House GOP majority. It has to become a reality.

We have yet to see exactly what the newly empowered IRS will do with its power and its newly hired 87,000 workers. But from the Department of Justice’s attacks on pro-lifers and intimidation of parents to the FBI’s persecution of conservative activists, we’ve seen the lengths to which this White House and its allies are willing to go as they weaponize multiple branches of the federal bureaucracy against political and ideological opponents. We can’t forget that previous Democratic administrations have been happy to wield the IRS to suppress critics. “We all remember how Barack Obama’s IRS went after Tea Party groups and other conservative organizations before and after the 2010 midterm wipeout,” John Hinderaker noted in a Powerline piece on the recent IRS expansion.

Mostly, they slow-walked the 501(c)(3) approval process. But imagine an IRS hostile to conservative principles, and emboldened by an eight-fold budget increase and 87,000 new agents. What would the IRS do in the liberals’ wildest dreams?

The Left’s argument for the IRS expansion was that it would provide more resources to crack down on ultra-rich tax cheats. It’s more likely that the expansion will provide more resources for what the IRS does already: harass middle- and even lower-class Americans. A TRAC report last week found that “during FY 2022, the odds a millionaire was audited by an IRS revenue agent was just 1.1 percent.” On the other hand, “the taxpayer class with unbelievably high audit rates — five and a half times virtually everyone else — were low-income wage-earners taking the earned income tax credit.” Analyses of the new provisions don’t exactly inspire confidence that things will be any different. John Fund reports:

A congressional analysis projects that most of the additional audits will be done on those making under $200,000 annually. The Senate rejected an amendment from Senator Mike Crapo (R., Idaho) that would explicitly limit audits and enhanced enforcement to taxpayers and companies making more than $400,000 annually. Every Democratic senator voted against the Crapo amendment, while all Republican senators supported it.

It seems reasonable to expect that the audits will tilt toward the self-employed and those who run small businesses. The rich will remain, as they are now, insulated by top-dollar lawyers and accountants.

As I’ve noted before, well-to-do small business owners in the upper-middle-class — what Marxists would describe as the “petite bourgeoisie” — make up a core part of the Republican constituency. The class realignment in American politics has much more to do with college education and culture than actual income. Republican voters are often relatively well-off economically but are less likely to have a college education; they make their money as the owners of regional businesses and firms rather than as Wall Street tycoons or Silicon Valley executives. Most of the super-rich, on the other hand — the demographic that Democrats claim will be targeted by the new IRS goon squad but that will likely end up escaping most of its scrutiny — are, in fact, Democrats. In the 2020 presidential election, Biden won the vote in 16 of the 25 wealthiest counties in America.

It’s not surprising that Democrats are so enthusiastic about an initiative that will disproportionately burden the “wrong” constituencies. But Republicans can’t take this assault lying down. The empowered IRS is an attack on their voters — and, ultimately, on the freedoms of all Americans.

Editor’s Note: An earlier version of this report cited an August piece that misattributed projections about new audits to the Tax Foundation. That piece has now been corrected, and this piece has been updated to reflect that correction.