This morning, I wrote about how Janet Yellen’s math doesn’t add up on the claim that the expanded IRS resulting from the Democrats’ reconciliation bill will audit only the highest-income earners. Now, a Congressional Budget Office estimate is providing more evidence of Democrats’ duplicitousness.
During the reconciliation bill process in the Senate, any senator can introduce an amendment. That meant that many Republicans offered amendments to force Democrats to take votes they might not have wanted to take. One such amendment was from Senator Mike Crapo (R., Idaho). It would have added to the IRS funding portion of the reconciliation bill that “none of the funds . . . may be used to audit taxpayers with taxable incomes below $400,000.”
That is exactly the line that Yellen, in her letter to the IRS commissioner, was saying Democrats support. Yet, when given the chance to vote on putting that language in the bill, all 50 Senate Democrats voted against the amendment.
Today, the Republicans on the House Ways and Means Committee said the CBO has estimated that the cost of Crapo’s amendment would have been at least $20 billion. That would mean that the CBO expects at least $20 billion of the new revenue Democrats were counting on from increased tax enforcement to come from audits of taxpayers making less than $400,000.
Democrats have always been all over the map on how much money increased tax enforcement would raise, with the Washington Post reporting in July of last year that some Democrats thought they could get $1 trillion in new revenue over the next decade. The CBO has been consistent for years in telling lawmakers from both parties that tax enforcement is not the revenue panacea they want it to be, with their estimate this time being a net revenue gain of $124 billion. But now we know that estimate was counting on $20 billion of it coming from people who, according to Yellen, will not be forced to pay.
The likeliest outcome here is not an army of auditors crashing through the doors of middle-class Americans. Rather, it is that the IRS gets a bunch of taxpayer money and little else happens. Remember, most IRS employees are represented by the National Treasury Employees Union, which donates almost entirely to Democrats. One of the primary missions of the Democratic Party, in practice, is shoveling taxpayer money to unionized government employees. No matter who gets audited, that mission is accomplished by the reconciliation bill.
But from here on out, Democrats are the party of doubling the IRS. The IRS is still going to audit people making less than $400,000. Even if those people would have been audited anyway and the audit rate doesn’t change at all, Democrats should expect Republicans to make an issue of it on the campaign trail. As the estimated revenue raised by the provision continues to get chipped away, the payoff might not be worth it for some House Democrats come November. And now, because of Crapo’s amendment, every Senate Democrat is on the record opposing the $400,000 barrier. Those ads write themselves.