Kevin McCarthy's first speech as Speaker:
"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."
Your tax return probably won't get audited. Hardly anyone gets audited. People with incomes between $25,000 a year and $100,000 a year have a 0.36% chance of being audited, about one in 300. People with incomes of $1 to $25,000 have a 0.86% chance. People most likely to be audited are those reporting no income, i.e. the poorest Americans. They apply for the Earned Income Tax Credit. The rules are complex and very low income people frequently file without getting professional help. They make easily-spotted errors, picked up by IRS software.
Of more consequence is the audit rate for the highest income taxpayers. That is where the money is. People with reported incomes between one and five million dollars have a 3.15% chance of an audit. It climbs to 6.4% for taxpayers showing incomes of $5-10 million a year, and to 12% for people with annual incomes in excess of $10 million.
Americans sign their tax returns under penalty of perjury.
Back 23 years ago my Republican friends were adamant that Bill Clinton should be impeached and prosecuted because he lied/mislead interrogators over the meaning of the word is. Perjury is perjury, they said. I reminded them that they file their tax returns under oath. Were you "aggressive" in your filing, I would ask? They said it was different. "Aggressive" was taking a position and letting the IRS say you were wrong, if they audited you, but they probably wouldn't. I said perjury was perjury.
The Inflation Reduction Act was mostly about greener energy. One element that addressed both the deficit and inflation was to reduce the $600 billion annual "tax gap" of owed but uncollected taxes. The Act budgeted $80 billion for the IRS for the next 10 years. The IRS is short-handed. They have eight-million unprocessed 2021 returns and only answered 11% of incoming calls from taxpayers. The money would restore the employees lost to budget cuts over the last decade.
The new money became a lightning rod. There would have been multiple reasons for Republicans to favor this part of the Inflation Reduction Act. It could have been money so government bureaucrats would be more responsive. It was money for law enforcement. It reduces the deficit. It captures the ill-gotten gains of drug gangs. It makes it harder for undocumented people to work under the table. There was none of that. Instead, Republican messaging positioned it as funding 87,000 gun-carrying Gestapo agents.The GOP approach is another iteration of normalizing and legitimizing law-breaking, when it is done by "one's own team." GOP lawmakers made a legitimate point that some elected Democrats, especially in West Coast cities, tolerated and minimized lawbreaking associated with the Black Lives Matter protests of the summer of 2020. Democrats took a political hit for that. Here Republican messaging on the IRS coincides with their messaging on the 2020 election and the January 6 riots. They tolerate legal fictions and "aggressive" positions to justify voiding the election. We should just claim the election was stolen, Trump instructed. A White House lawyer captured that in a handwritten note: "Just say that the election was corrupt + leave the rest to me and the R. Congressmen." A majority of Republican congresspeople did exactly that, including my own, Cliff Bentz, who voted to void the Pennsylvania election.
GOP messaging is that enforcement of the law to collect legally-owed taxes is tyranny. Therefore, defund the enforcers. The real damage is to the social norm. Laws can be enforced gently when laws conform with norms. Most people do what is expected. When lawbreaking is normalized people break the law. A culture of corruption grows. It is especially dangerous when the norm is endorsed by the lawmakers themselves.
Wealthy people are not afraid of fines. It is a cost of doing business as a tax cheat. They are afraid of prison. The law is already there. It takes IRS agents to enforce the law. Enforce them, and put a few high-income people, and their accountants, in prison. That will change norms.
5 comments:
After 15 votes, the most they’ve had since 1859, Kevin McCarthy finally got a few more than Hakeem Jeffries – not a majority of the House, but a bare majority of those who voted. On finally winning, his big applause line was: “I hope one thing is clear after this week. I will never give up.”
Actually, he gave up a lot. He gave up any semblance of dignity when he went to Mar-a-Lago and groveled before his conspirator-in-chief. He also had to make concessions to MAGA election deniers, assuring them that Trump’s legacy of anger, hatred and lies would be perpetuated. He’s about to learn the truth of an old saying, “Beware of what you wish for.”
There’s another old saying at work here: “Whom the gods would destroy they first make mad.” Let’s hope that only applies to the GOP rather than the entire U.S., but further weakening the country's already inadequate tax system doesn’t bode well.
It would be interesting to see the results of a competently done poll on how important logical consistency and strict adherence to principles are to American voters.
Peter makes a good point, but my guess is that most people in this country don’t care a whole lot about that point.
Question for Peter:
How many of those affluent tax dodgers were convinced by his argument about consistency to redo their tax returns and pay more?
The s***show has officially begun.
Rules for thee but not for me refers to a new emerging idiomatic phrase, that is used by people to express their disregard for certain regulations.
It is often used in critique of politicians, who always seem to break their own laws.
Judging by the fact that Trump was once our president, many voters probably wouldn't comprehend the meaning of "logical consistency and strict adherence to principles." But many of us do understand and care about patriotic duty.
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