Biden’s so-called “Inflation Reduction Act” includes $79.6 billion over the next 10 years to hire another 87,000 IRS agents.
They claim this will generate $203.7 Billion in incremental tax revenues over the next ten years for a projected net positive impact of $124 Billion. This is more than 100% of the current Congressional Budget Office (CBO) estimate of $102 Billion in deficit reduction over the next ten years (a mere $11 Billion per year).
“This is not about inflation reduction, this is all about Democrats spending on things they want to spend money on. I’m not going to support it. I don’t think any Republicans are going to support it. Why is that? Well, it’s another taxing and spending bill,” said Sen. Mitt Romney of Utah in response to the bill.- ABC News
Quote from CBO after concessions were made in the legislation to get Senator Krysten Sinema to agree to support it:
“On August 5, 2022, CBO issued a revision to the table published on August 3, 2022, to include estimates of spending for sections 13601 and 13802. As a result, the updated estimate of the deficit reduction was lowered by $11.0 billion over the 2022-2031 period. CBO’s estimate of H.R. 5376, the Build Back Better Act, as passed by the House of Representatives on November 19, 2021, also did not include an estimate of the spending that would result from enacting a similar provision, section 136701. As a result, the estimated deficit for that piece of legislation also would be different, but CBO has not finished its estimate of that spending.” – CBO
So putting aside the unresolved issue of how much this new spending will add to the US annual rate of inflation, one of the other big questions is this:
What if the estimates of how much (illegal) tax evasion by those making over $400,000 in adjusted gross income is actually wildly overblown and only a small portion of the $203.7 billion of the projected increase in incremental tax revenues (Roughly $20 billion per year) materializes? Will Biden cut those 87,000 new agents if it turns out they aren’t really paying for themselves in the form of increased tax revenues? Has any Democrat President in history ever reduced the number of Federal employees (who, as a group, overwhelmingly vote Democrat)?
Oh, and of course, unlike corporations which are required to include as an annual business expense (and to pay into a trust fund annually) any earned & accrued pension benefits for any employee who has a defined benefit pension plan (like all government employees have), the Federal Government is not required to recognize that pension liability expense when calculating the cost of hiring & paying new employees. So will those 87,000 new IRS agents ultimately cost the Government more than the projected $79.6 Billion? The answer is not only a yes but “Yes, WAY MORE” when you take into account their earned (but unrecognized) pension benefits.
Submitted by Jersey Joe.
In Case You Missed It: Sally C. Pipes, president and CEO of the Pacific Research Institute, discussed the Senate Reconciliation Bill with John on Thursday, August 4, 2022.