Senate Republicans balk at raising IRS to cover Democratic spending
- Senate Republicans are reluctant to strengthen IRS enforcement to fund infrastructure.
- “I am very skeptical that there is a lot of easy money to be had from the so-called tax enforcement,” said a GOP senator.
- The IRS is already under close scrutiny by the GOP following a leak of the personal tax records of wealthy Americans.
- See more stories on the Insider business page.
There is one measure that is the subject of new debate in bipartisan negotiations for a $ 1,000 billion infrastructure plan: strengthening the IRS to raise more money from the rich. tax evaders.
It was pushed by moderate Democrats this week as a source of additional revenue that could fund infrastructure spending, but the idea appears to be meeting opposition from Republicans, who have long accused the tax agency encroaching on the personal lives of Americans. The IRS is already under GOP scrutiny following a recent ProPublica report that leaked the tax records of wealthy Americans.
They also don’t believe that chasing wealthy tax evaders will actually generate a significant amount of money.
“I am very skeptical that there is a lot of easy money to be obtained from the so-called tax enforcement,” Senator Pat Toomey of Pennsylvania, ranked Republican on the Senate Banking Committee, told Insider. . “We could spend a lot more money, we could have a lot of intrusive rules and find that we don’t have a lot of difference in income.”
IRS chief Charles Rettig told a congressional panel in May that the amount of taxes not collected each year could exceed $ 1,000 billion. Several Republicans, including Toomey, told Insider they were skeptical of the number so high.
The Biden administration advanced $ 80 billion in additional IRS funding as part of its spending plans, to correct years of GOP-led budget cuts at the agency – and a related drop in the number of audits. The White House predicts the funds could generate $ 700 billion in new revenue, although some experts have disputed their estimate.
The bipartisan group is leaning towards putting $ 40 billion in the IRS. That could generate $ 103 billion in total tax revenue, or $ 63 billion in new spending for infrastructure overhaul, the CBO estimates.
“We think we have a good balance with where we are, and there are colleagues on my side of the aisle who are nervous about the [$63 billion] net figure because they are concerned about trespassing, âSenator Rob Portman, a GOP negotiator, told reporters, by the Wall Street Journal.
Other Republicans have suggested closing the tax gap might be worth it, although they were still cautious about how much money it could produce.
âWe don’t want people to be hassled, but I think everyone should pay their taxes,â Mississippi Senator Roger Wicker told Insider. “I don’t think there is as much ‘there’ out there as people think.”
Other prominent Republicans rejected the idea. West Virginia Senator Shelley Moore Capito challenged the administration’s estimate as being overly optimistic and said it could lead to “expedited reporting” and ineffective results.
“You have to get a better number,” said Capito, who had been the Republicans’ main negotiator on an infrastructure package before President Joe Biden cut talks with her weeks ago, citing a failure to s ‘hear about how to finance a package.