New GOP House Votes to Rescind Billions in IRS Funding
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On Monday night, the new GOP-dominated House voted to rescind more than $70 billion in funding for the Internal Revenue Service, threatening to kill the Biden administration’s plans to dramatically expand the tax-collection bureaucracy.
The measure succeeded with 221 Republicans voting in favor and 210 Democrats opposing. Spearheaded by Representatives Adrian Smith (Neb.) and Michelle Steel (Calif.), the bill targets the massive amounts of money allocated to the IRS in the deceptively named Inflation Reduction Act.
“Our first bill will repeal funding for 87,000 new IRS agents, because the government should be here to help you, not go after you,” House Speaker Kevin McCarthy (Calif.), who had just clinched the speakership after a multi-day marathon of ballots and negotiations with GOP detractors, told the chamber Saturday.
The Inflation Reduction Act funneled $80 billion to the IRS over ten years with only about 4 percent of the money going to taxpayer “assistance” and the bulk going to pay for tax investigations and new positions, the GOP alleged. Republicans preserved provisions of the Democrat-backed legislation that supported modernization efforts at the IRS, such as customer service and IT improvements.
The IRS, Democratic lawmakers, and President Biden had argued that the funding for the agency would not impact Americans making less than $400,000 annually. However, Republicans maintained that the funding would have increased audits of taxpayers earning under $400,000 in income.
On Monday, the Congressional Budget Office, which analyzes the fiscal cost of legislation, reported that the GOP measure would increase the deficit by $114 billion. The Treasury Department claimed that the funding for the IRS was intended to extract more tax revenue from wealthy individuals than from the middle class.
“House Republicans’ legislation would allow wealthy and corporate tax evaders to continue avoiding taxes owed, increasing the burden on honest, hardworking families who pay their taxes with every paycheck,” a Treasury spokesperson told ABC News. “The IRS audits nearly 80% fewer millionaires than a decade ago, and this legislation would deny the agency much-needed resources to hire top talent to go after the $163 billion in taxes avoided by the top 1% annually.”
The GOP bill, called the Family and Small Business Taxpayer Protection Act, next goes to the Senate, which is narrowly controlled by the Democrats.
