House Republicans passed their first bill of the 118th Congress on Monday night, voting along party lines to cut $71 billion from the IRS. The legislation will not be taken up by the Democratic-controlled Senate, and President Biden said Monday he would veto the cuts if they somehow arrived at his desk. Before the vote, the Congressional Budget Office said the legislation would increase the federal deficit by $114 billion over the next 10 years.
Democrats approved $80 million in IRS funding in the Inflation Reduction Act last year. The IRS says the money will be used to hire 87,000 new employees over the next 10 years, upgrade the agency's antiquated technology, and beef up enforcement of tax laws on taxpayers earning more than $400,000 a year. Many of the 87,000 new IRS workers will be in customer service, to answer taxpayer questions, the Biden administration says, and others would replace the 50,0000 IRS agents expected to quit or retire in the coming years.
House Republicans promised to prioritize cutting those funds, arguing they will be used to harass middle class taxpayers and "create a 'shadow army' to shake down small businesses with assault rifles," The New York Times reports. "Our very first bill will repeal the funding for 87,000 new IRS agents," House Speaker Kevin McCarthy (R-Calif.) said Saturday morning, shortly after being elected speaker on the 15th ballot. "You see, we believe government should be to help you, not go after you."
Former IRS Commissioner Charles Rettig, a Republican appointed by former President Donald Trump, said last November that the new investments in his understaffed agency would make it "even less likely for honest taxpayers to hear from the IRS or receive an audit letter." Treasury Department spokeswoman Ashley Schapitl said Monday that "the IRS audits nearly 80 percent fewer millionaires than a decade ago," and the House bill "would deny the agency much-needed resources to hire top talent to go after the $163 billion in taxes avoided by the top 1 percent annually."
"The only way that House Republicans could make it any more obvious that they're doing a favor for wealthy tax cheats is by coming out and saying it in exactly those words," said Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee. "This bill is going nowhere in the Senate."