Politics

Democrats Are Turbo-Charging The IRS To Go After The Middle Class

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The reconciliation package proposed by Democratic Sens. Joe Manchin of West Virginia and Chuck Schumer of New York includes $80 billion in new funding for the Internal Revenue Service (IRS) that will allow the agency to set its sights on middle-class Americans.

Increases in IRS funding are laid out in Section 10301 of the 725 page “Inflation Reduction Act,” and the lion’s share of the funding — $45.6 billion — is earmarked for “enforcement,” including “litigation,” “criminal investigations,” “investigative technology,” and “digital asset monitoring.” Proponents argue that the funding will allow the IRS to bring in more than $200 billion in additional revenue from those under-reporting income, but skeptics like The Wall Street Journal editorial board argue that much of this funding will come straight out of middle-class and upper middle-class Americans’ wallets “because that’s where the money is.”

Taxpayers with adjusted gross incomes below $75,000 would ultimately shoulder an estimated $136 billion of the IRS’ proposed revenue increase within the Manchin-Schumer package, according to estimates that the Heritage Foundation’s senior tax policy analyst, Preston Brashers, shared with the Daily Caller News Foundation.

Between 78% and 90% of the expected returns would come from those making under $200,000 a year, while just 4% to 9% would come from those making upwards of $500,000, according to estimates on a similar proposed funding increase conducted in the past by the Joint Committee on Taxation.

The $80 billion in funding would be doled out over nine years, and thus would come close to doubling the IRS’ budget of $12.6 billion on an annual basis.

The mega-rich will likely not take much of a hit because the IRS knows they have armies of lawyers and accountants that “make litigation time-consuming and risky,” the WSJ editorial board argued.

This increase in enforcement measures would be on top of tax increases on middle class Americans that are also in the spending package, despite claims from proponents of the bill like by Manchin that “there’s not one penny of change in taxes.” (RELATED: Democrats Claim The ‘Inflation Reduction Act’ Won’t Raise Taxes. Here’s Why That’s Not True)

Mike Palicz of Americans for Tax Reform also noted that “most new IRS agents will join the IRS labor union, which gives 100% of its PAC funding to Democrats.”

The IRS, Schumer and Manchin did not immediately respond to the DCNF’s request for comment.

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