Why Cutting IRS Funding Is Not Conservative

Washington Post Op-Ed:  Why Cutting IRS Funding Is Not a Conservative Move, by Brian Riedl (Manhattan Institute):

Last year, President Biden and congressional Democrats enacted $80 billion in new IRS funding for the next decade. During the debt limit debate earlier this year, Republicans successfully negotiated a $20 billion cut in that funding. And now, in the appropriations showdown, they’re going after the rest of it.

The IRS has long been an easy and popular target, because few of us enjoy paying taxes. And the agency has invited criticism with its history of overzealous audits, including a heavy-handed targeting of conservative nonprofit organizations during the Obama administration that fueled the latest round of GOP cuts.

However, defunding and weakening the IRS is not conservative. To the contrary, it will ultimately drive up deficits and raise middle-class taxes.

Between 2010 and 2021, the inflation-adjusted IRS budget fell by nearly one-quarter, according to the Center on Budget and Policy Priorities. Tax enforcement staff declined by 31 percent, and the number of revenue agents collapsed to 1954 levels — even as the taxpaying population doubled, and the tax code grew vastly more complex. Thus, during the 2010s, audit rates fell by 54 percent for large corporations and 71 percent for millionaires.

Consequently, the amount of unpaid taxes has jumped to $625 billion per year, driven heavily by the underreporting of corporate and pass-through business income. ...

[D]efunding the IRS costs the government money because each dollar in tax enforcement spending brings in as much as $5 to $9 in unpaid taxes. ...  The original $80 billion in new IRS funding — to be split between taxpayer services, operations, modernization and tax enforcement focused on upper-income taxpayers — was projected to bring in $180 billion over the decade.

We need this revenue. My fellow fiscal conservatives must grasp the inescapable truth that in the long term, federal taxes are headed upward. Annual budget deficits now exceed $2 trillion and will surpass $3 trillion within a decade. ...

Curtailing IRS abuses does not require tolerating $625 billion in annual tax evasion. That’s an expense we can no longer afford.