U.S. Tax Army to Expand

Chris EdwardsThe Inflation Reduction Act being considered by Congress would vastly expand the Internal Revenue Service. The IRS currently has82,000 employees, and the legislation would boost the number by roughly 87,000, according to a  related Treasury estimate (Table 3).Of the $80 billion increased IRS funding in the Act, $46 billion would go to enforcement. That expansion promises to damage small ‐ and medium‐​sized businesses andundermine civil liberties. Politicians complain about tax cheats, but noncompliance islow in the United States compared to other countries.All those new IRS employees would undermine GDP rather than producing it. But that would be only part of the waste. Another cost would be the increased time and energy needed by taxpayers, lawyers, and accountants to defend against a  more aggressive IRS.The Inflation Reduction Actadds or expands a  slew of special ‐​interest tax breaks and creates a parallelcorporate tax structure based on financial statement income. Those misguided changes would also increase tax compliance costs on the private sector.The Office of Management and Budget estimates that individuals and businesses currently spend6.5 billion hours a  year on federal tax paperwork, which is equivalent to 3.6 million people working full‐​time on this unproductive activity. That “Tax Army” is two and half times larger than our uniformed military of1.4 million service members, as shown in the chart.The Inflation Reduction Act w...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs