Times Change But Congress’ Budgetary Debates Don’t

Times change but the tactics employed by politicians to bend a reluctant electorate to their will don't, as the arguments to massively boost the Internal Revenue Service's budget attest. Tax increases are never popular, so their advocates search for ways to convince voters that they are desperately needed to avoid cuts in truly vital services. Growing up in the Midwest decades ago, I couldn't help but notice that advocates of increased local taxes could be counted on to warn that unless the increases they proposed were approved, the first cuts that would have to be made would be to the high school football program. 

High school football was big back then and remains so today. So voters would swallow hard and accept the tax increases to save the local team. They rarely noticed that the argument was a ploy. The high school teams were never on the chopping block, and the additional revenues the politicians were seeking would go to pet projects they wanted but which might never have won public approval on their own merits.

We see the same sorts of arguments emanate from Congress and the White House almost weekly. Unless a weapons system sought by high-paid defense industry lobbyists is approved, our national security will be at risk, or a failure to support this or that social spending proposal will put hard-working Americans out of work or lead to death and destruction. Of course, it is possible that such arguments might have some merit in very rare cases, but in most cases, such rhetoric should be dismissed as the sort of hyperbole one might expect from a door-to-door salesman peddling a new roof.

The litany of dire consequences is endless, as is the promise that higher taxes will at the very least take us one more step toward a perfect society. And when one argument fails, one can count on the advocates of more spending and higher taxes to come up with another. That is precisely what is happening today as Democrats in Congress and the White House failed earlier this year to get the legislation they sought to fund and further weaponize the IRS.

Last summer, President Biden's initial proposal was that if Congress would increase the IRS budget by $80 billion over the next decade, the agency could go after wealthy tax cheats wringing as much as $200 billion out of them to help fund the Biden spending agenda. The proposal passed the House as part of what he called his “Build Back Better” spending package but was killed for the time being in the Senate. Some of that money might have gone to modernizing the agency's outdated computer system or to hiring people to actually answer the phone when a taxpayer calls, but most of it was to be used to beef up the agency's ability to audit and harass its customers. Biden wanted to hire 87,000 new agents and thus enable the IRS to vastly increase its ability to root out financial irregularities and conduct audits, according to The New York Times.

Few in Congress wanted to have to go home to let their constituents know that they had voted for an appropriation to create what would amount to a virtual army of agents for an agency which in recent years has been seen as tone-deaf and increasingly hostile to taxpayers and whose mission would be to harass taxpayers to squeeze additional monies out of an already overtaxed public.

It must have been at that moment that the president's strategists remembered how effective threatening to eliminate high school football has been at the local level over the years. They have therefore come up with a new argument that Congress must pass the increase or the average taxpayer will face inordinate delays in getting his or her returns processed by an overworked agency that might not even be capable of getting taxpayers the refunds they have coming in anything approaching a timely manner. The money is no longer for an army of agents but to make the IRS more efficient and user-friendly.

There is no question that the agency is currently understaffed and incapable of handling a growing workload. As this is being written, the IRS hasn't even finished processing twenty-four million returns from as far back as 2020, and we are now being told that unless the agency gets the money requested, many taxpayers may not get the refunds they are expecting this year in anything approaching a timely manner. The poll data available demonstrate that these warnings are having an impact on the 40% of American taxpayers who are expecting a refund this year. Some 67% of these taxpayers indicated in a recent Bankrate.com survey that they are worried about delays in getting their refunds as well as wondering how much the money they eventually get will be worth given their fear of escalating inflation. To many of these taxpayers who rely on their refunds to help pay living expenses, this is a greater threat than abandoning high school football.

But neither the president nor his allies in Congress are as concerned about this as squeezing more money out of taxpayers to finance their spending schemes. More than half of the money the Biden administration requested was slotted for “enforcement” rather than to update the agency's notoriously outdated computer system, much of which dates back to the Kennedy administration, or to provide real-time help and advice to the taxpayers who call in on helplines that are rarely answered and provide little help when they are. Instead, the proposal would be to hire 87,000 new employees, most of whom would be told to go after individuals and corporations for more money and would roll back some of the reforms designed to prevent enforcement abuse passed by Congress in the Internal Revenue Service Restructuring and Reform Act of 1998.

Lesser amounts would be used to modernize the outdated computer system on which billions have been spent over the last decade with little to show for it. In fact, every attempt to update the system has failed spectacularly, repeatedly demonstrating that the agency is badly run and managed. Indeed, while the Biden administration likes to blame the problems at the IRS on congressional Republicans and GOP presidents hostile to the agency and too cheap to provide the money needed to modernize it, congressional outrage at waste, fraud and incompetence has led to bipartisan skepticism at the wisdom of throwing more and more money into what has amounted to a black hole.

The problems at the IRS may be partially financial. Pay tends to be low for those tasked with responding to taxpayer inquiries and providing the services that are supposedly part of the agency's core mission, and attracting employees to work in an agency despised by much of the public is more difficult than in the past. Two years ago, the IRS leadership admitted that the agency needed additional staff to answer the phones and process the backlog of returns that kept piling up and decided to hire 5,000 new employees to deal with the problem. They got permission to relax some federal hiring rules and launched a campaign to recruit the 5,000 employees they believed were needed. To date, the campaign has resulted not in 5,000 new hires but only about 200. Last week, to “solve” this problem, the agency got more leeway in hiring and upped the target from 5,000 to 10,000.

Given this result, one wonders where the Biden administration believes the agency will find the 87,000 new people it wants brought on to beef up enforcement, especially at a time when similar jobs in the private sector are unfilled because of a shortage of potential employees willing to work. Of course, with the billions the administration wants, salaries and benefits could be increased so the government can pay more and offer better benefits than the private sector for attorneys, field agents and investigators.

Throwing money at a dysfunctional agency is not a solution to the problem. The IRS is pretty good at collecting money now because very few taxpayers cheat and voluntarily comply with laws and regulations that even the experts have a hard time understanding. The way it treats those it targets and the general attitude of many of its agents, along with the agency's apparent disdain for taxpayers with whom it interacts, means it ranks as one of the least popular federal agencies. Many IRS employees, in fact, try to keep their employment there from their friends and neighbors out of embarrassment.

The agency may need some additional funding not to go after taxpayers but to help them. What it really needs is reform both in terms of the way it operates and in its priorities; reform that won't take place when its overseers in the White House and Congress don't much care how it goes about collecting more and more money from hard-working Americans.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.