The Corner

Fiscal Policy

An Obstacle to Beefing Up Tax Enforcement

Back in 2019, I wrote a piece urging Congress to “enforce the tax laws we already have.” If fewer people got away with cheating on their taxes, we could raise the same amount of money with lower rates, or use the proceeds to reduce the deficit.

As it happens, Congress is currently considering some new enforcement measures — though the Democrats in charge want to blow the money on entirely new spending. But they’ve hit a snag.

Reports Politico:

The problem is budget scorekeeping rule number 14.

It prevents lawmakers from incorporating into calculations of how much legislation costs any savings from increasing IRS audits or other “program integrity” initiatives across the government designed to make programs more cost-effective — such as cracking down on fraudulent Social Security disability payments.

“No increase in receipts or decrease in direct spending will be scored as a result of provisions of law that provide direct spending for administrative or program management activities,” the rule says.

That’s because government forecasters have long considered those savings too iffy to be relied upon.

As you can see, the rule cuts both ways politically: It applies to going after rich tax cheats as well as folks who defraud welfare programs. The difficulty of estimating such savings is, of course, real, and scorers should probably err on the side of more cautious predictions. But it’s not as if scoring other types of provisions is an exact science. And it seems silly to entirely ignore parts of a bill that will, without a doubt, raise a non-trivial amount of revenue.


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