Republican IRS shenanigans will cost even more than expected

Republican IRS shenanigans will cost even more than expected

There was a lot of Republican anger over the recent debt ceiling deal—and it was delicious—but that shouldn’t obscure the ways they managed to extract concessions that will harm the country. One of their big wins, which Republicans would claim saves $20 billion in spending, could actually cost the U.S. $240 billion in revenue for an overall $220 billion loss, a new study finds. That money will instead stay in the bank accounts of the very wealthiest people.

How? The $20 billion in cuts are to the Internal Revenue Service, following nearly a year of Republicans screaming about the additional IRS funding in the Inflation Reduction Act. And if the IRS cuts back on audits, or doesn’t expand them as planned, then tax cheats get away with it and the federal government has less money for important services.

A new study conducted by researchers at Harvard University, the University of Sydney, and the Treasury Department digs into 710,000 in-person audits from 2010 to 2014, finding that the return on investment for audits of the wealthiest households—not just the top 1% but the top 0.1%—is far greater than previously understood. That’s why their estimate of how much the Republican debt limit demands will cost is so much higher than the Congressional Budget Office estimated in losses for the IRS funding change.

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