Sunday, July 06, 2014

The Real Internal Revenue Scandal

By THE EDITORIAL BOARD, NYT
JULY 5, 2014

There is a scandal going on at the Internal Revenue Service, but it has nothing to do with Lois Lerner or her missing emails. House Republicans have not given up on their noisy crusade to tie Ms. Lerner to what they imagine to be widespread political corruption within the Obama administration, but all they have proved is that the I.R.S. is no better at backing up its computer files than most other government agencies.

No, the real scandal is what Republicans did to cripple the agency when virtually no one was looking. Since the broad Tea Party-driven spending cuts of 2010, the agency’s budget has been cut by 14 percent after inflation is considered, leading to sharply reduced staff, less enforcement of the tax laws and poor taxpayer service.

As the economist Jared Bernstein noted recently in The Washington Post, a weakened I.R.S. enforcement staff will be unable to make a dent in the $385 billion annual gap between what taxpayers owe and what they pay — an unintended tax cut, mostly for the rich, that represents 11 percent of this year’s spending. Middle-class taxpayers who struggle to fill out their 1040s may welcome a diminished threat of an audit, but in fact this reduction is not about them. The I.R.S. audits a far higher percentage of tax returns from people reporting incomes over $200,000 than from those reporting less, because that is where the money is (along with the most profitable cheating).

(More here.)

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