The package, which proposes about $437 billion in new spending, will likely pass the House. The Senate approved the 750-page bill on Sunday along party lines, with all 50 Senate Republicans, including Utah Sens. Mike Lee and Mitt Romney, voting “no” and Vice President Kamala Harris breaking the tie in the evenly divided chamber.
President Joe Biden has said he would sign the bill when it reaches his desk.
Rep. Blake Moore, R-Utah, said ahead of Friday’s vote that he is “adamantly” opposed to the legislation, calling additional funding for the Internal Revenue Service “completely misguided.” His northern Utah district is home to thousands of IRS workers.
“What I have learned through working with them is that the IRS does need support. They need better technologies and better customer service capabilities. What they are not in need of, however, is what the Democrats are pushing for in their massive federal spending package,” he said.
The would direct about $80 billion to the IRS, with more than $45 billion of that to be used for tax payment enforcement. Another $25 billion will go to operational support, almost $5 billion for new technology and $3 billion for services for taxpayers, including prefiling assistance and education, according to Congressional Research Service.
Moore and Republicans say the funding would allow the IRS to hire 87,000 agents to conduct more audits of Americans in nearly every tax bracket. And, he said, “we have seen the IRS directed to target certain populations, often conservative groups, and I’m concerned we would see similar biased and political activity with this new funding.”
Low and middle income earners will be hit with an estimated 700,000 new audits, which would hurt small businesses and low-income Americans, Moore said.
“This is the worst possible way to raise tax revenues after two quarters of negative GDP growth.”
The potential for more audits and hassles with the IRS targeting average Americans has been a talking point among Republicans in Congress as the legislation advanced, while Democrats have emphasized the need to collect taxes owed by wealthy tax scofflaws, including corporations.
The 87,000 figure came from a Treasury report released in May 2021 about how the Biden administration hoped to address the “tax gap” — the difference between what is owed to the government and what is actually paid. That figure was believed to be at least $381 billion a year, with most of it because of underreporting of income, according to the nonpartisan Joint Tax Committee.
The Biden administration is planning to hire 87,000 IRS employees over the next 10 years — not IRS audit agents — and many will be replacing people who will retire soon, according to the Washington Post. The report says the new staff, added in annual increments of about 7,000 to 12,000 people, would conduct audits, improve informational technology and enhance customer service.
Other GOP House members from Utah have also cited the hiring of more IRS agents among their reasons for opposing the bill.
“Last year, households earning less than $25,000 were FIVE TIMES more likely to be audited by the IRS. Now Democrats are fighting to bankroll 87,000 NEW agents. This is the last thing Americans need,” Rep. Burgess Owens tweeted.
Rep. John Curtis said that the number of new IRS agents is more than the number of people employed at the Pentagon, U.S. Border Patrol and FBI combined.
“And their job — find ways to pay for the extra spending through audits. More government isn’t the answer,” he said in a tweet.
“We need real fiscal reforms that put us on a path to fiscal sanity, not budget gimmicks to try and justify this grab bag spending spree,” Curtis said. “Raising taxes, which will hurt economic growth and job creation + hiring 87,000 IRS agents to audit millions of Americans is not the answer to our out of controlled spending, especially in a recession.”
Rep. Chris Stewart argues the bill would have little to no impact on inflation, citing the nonpartisan Penn Wharton Business Model, the Congressional Budget Office and the Bipartisan Policy Center.
.@SenSchumer called the inaptly named Inflation Reduction Act a “game-changer.” How do nonpartisan experts think it will impact inflation?
Penn Wharton Budget Model: “statistically indistinguishable from zero”
The White House says the package will address inflation by lowering energy and health care costs for families and by helping to bring down the deficit.
This bill caps seniors’ out-of-pocket spending for prescription drugs at $2,000 per year, regardless of what their drug bills would otherwise be. In addition, 13 million Americans, covered under the Affordable Care Act, will see their health insurance premiums reduced by $800, Biden said in a statement after the Senate passed the measure.
The legislation also aims to tackle climate change and strengthen energy security by creating jobs manufacturing solar panels, wind turbines and electric vehicles in America with American workers. Biden said it would lower families’ energy costs by hundreds of dollars each year.
Biden said the establishment of a minimum corporate tax so that the country’s richest companies will pay their fair share for the bill’s initiative.
“It does not raise taxes on those making under $400,000 a year — not one cent,” the president said.
Romney last week called the bill a “liberal wish list” that reduces oil and gas production and raises taxes that companies will pass on to consumers.
Lee said families can’t afford the Biden administration’s latest “tax-and-spend scheme. If the definition of insanity is doing the same thing and expecting different results, then spending more money and increasing taxes to reduce inflation meets that definition.”