A Bigger, Badder Tax Man
Root canal or dealing with the IRS—which is more enjoyable?
The American tax agency has been underfunded and outmanned by armies of lawyers minimizing every penny that huge conglomerates fork over each year.
Remember the Inflation Reduction Act? Buried under the glitzy climate grants was an $80 billion investment in the IRS, giving it the firepower to wrangle taxes out of the most well-lawyered individuals and companies.
- Best case scenario: the extra bodies and tech upgrades will increase tax income by far more than $80 billion in the coming years
- To put it in perspective, the entire agency operated under a shoestring budget of less than $14 billion last year
- This past week, Joey B tapped veteran taxman Dan Werfel to head up the newly equipped agency
If you’ve ever mailed a check that the IRS didn’t get or took months to open and deposit, you have a tiny understanding of the stone age that this key government institution currently operates in.
Take the last few years’ stimmies. Theoretically, sending out checks to taxpayers shouldn’t be that difficult—they already have most bank accounts and addresses. Yet between PPP payments and processing paper returns, the IRS found itself buried under a mountain of mail that took months to crawl out of.
That’s embarrassing for the biggest economy on the planet. We can and should do better.
Opponents of the funding say the IRS is inherently screwed up and should have its power limited. But that guarantees crappy tax collections, which often mean higher-than-necessary rates for real workin’ folk.
The CBO estimates that “a $1 increase in spending on the IRS’s enforcement activities results in $5 to $9 of increased revenues.” Those are Madoff-type returns.
The big question: Will the IRS be able to get its act together and generate a return on its $80 billion transformation, or will it get swallowed up by bureaucracy and bloat?
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