U.S. Rep. Jim Banks (R-IN) has introduced legislation that would repeal funding dedicated for 87,000 new IRS employees, which was included in the Inflation Reduction Act. Instead, Banks' legislation would use the funds to increase and make permanent the standard deduction in the Tax Cuts and Jobs Act (TCJA).
"The Inflation Reduction Act would hit Americans with billions in new taxes and subject them to pointless and invasive IRS audits," Banks said in a news release. "My bill would use the $80 billion that Joe Biden is sending to the IRS to partially offset a tax break for working Americans. Democrats are treating hardworking taxpayers as suspected cheats and squeezing them dry to pay for their radical agenda, while House Republicans are trying to lower inflation by easing Americans’ tax burden. I’d like to thank Leader McCarthy for his commitment and leadership on this issue and for pledging to immediately defund Biden’s IRS army.”
The Congressional Budget Office (CBO) has estimated that the administration’s plan to increase funding to hire additional IRS staff would result in approximately $200 billion of additional tax revenue over 10 years from heightened tax enforcement activities.
According to the Senate Joint Committee on Taxation, increased tax enforcement activities would have a greater impact on those making $50,000 a year or less with over 50% of the projected revenue raised coming from taxpayers in that income bracket. The report also suggested that only about 4% to 9% of the additional tax revenue collected would come from those making $500,000 a year or more.
In place of funding for 87,000 new IRS staff, Banks’ filed legislation would make permanent and increase the standard deduction tax break from the Tax Cuts and Jobs Act. According to the legislation, beginning in 2023, the deductions would be set at $14,025 for individuals, $21,060 for heads of households and $28,050 for families and would increase by inflation every fiscal year.
According to the Tax Foundation, an increase to the standard deduction would equate to a significant annual tax decrease for middle-class Americans.
Republican Leader Rep. Kevin McCarthy (R-CA) has signaled his support for an initiative similar to what Banks has filed, stating during the GOP policy rollout in advance of the 2022 midterm elections that a Republican led House of Representatives would “repeal 87,000 IRS agents,” Politico reports.
