86,852 NEW IRS EMPLOYEES

You’ve probably heard Republicans say the Inflation Reduction Act includes provisions to hire 87,000 new Internal Revenue Service agents. The number seems too big too believe. The IRS has just 93,654 employees, according to the Office of Personnel Management. Why would Congress, in one bill, increase the IRS workforce by something like 92%? It doesn’t seem possible. It certainly doesn’t seem wise.

It’s not wise, but it is possible. And that is what 50 Senate Democrats, along with tie-breaking Vice President Kamala Harris, did when they passed the Inflation Reduction Act, which gives roughly $80 billion to the IRS between now and 2031.

It’s fair to say that Democrats are always searching for ways to wring more cash out of the American taxpayer. The obvious way to do that is to raise taxes. But the largest number of potential tax collections is in the vast middle of the U.S. income scale. To raise taxes on the middle class is politically unpopular. So Democrats pledge to raise taxes on the “rich” and “rich corporations.” The Inflation Reduction Act focuses on corporations, creating a minimum tax for companies with more than $1 billion in profits. As for individuals, the portion of the bill dealing with the IRS says, “Nothing in this section is intended to increase taxes on any taxpayer or small business with a taxable income below $400,000. Further, nothing in this section is intended to increase taxes on any taxpayer not in the top 1%.” Read it closely, and it doesn’t really mean anything.

The other way Democrats have sought to raise more taxpayer dollars is by beefing up the IRS. The idea is that Americans are evading all sorts of taxes, creating a “tax gap” — according to the Treasury Department, “the difference between taxes owed to the government and actually paid.” The Biden administration says tax cheats are primarily “high-income.”

The problem is what the problem always is: The big money is in the big middle class. Americans who make more than $400,000 — that includes people right at that number up to super-billionaires — are only about 1.8% of all taxpayers, even though they account for about 25% of the nation’s income. The other 98.2%, making up about 75% of the nation’s income, is a lot bigger. And indeed, that’s where much of current IRS enforcement is focused. The same will likely be true of the new, muscled-up IRS.

“The main targets will by necessity be the middle- and upper-middle class because that’s where the money is,” the Wall Street Journal editorial board wrote recently.

There will be a lot of increased enforcement; about $45 billion of the $80 billion for the IRS will go to investigating taxpayers. That means that not every one of the IRS’s 86,852 new employees will be auditors and examiners, but a lot of that manpower will in fact go to audits and increased scrutiny of taxpayers.

Why oppose such a move? After all, Democrats are assuring the public that the money will go to pursue “wealthy tax cheats,” in the words of Democratic Sen. Ron Wyden. Who is not in favor of going after wealthy tax cheats? Well, for one thing, they’re not all going to be wealthy, and they’re not all going to be cheating. The tax system is complex. People make mistakes that are not cheating.

Also — assume the IRS does, in fact, need more money for enforcement. How much is too much? It can be difficult for an organization to handle a huge windfall; it’s just too much to deal with efficiently. And that is what, it appears, Democrats have done to the IRS.

The $80 billion to the IRS is too much, too fast, with too little purpose. All Americans should be concerned about it.