Biden to seek extra $80B for IRS to enhance enforcement
President Biden is expected to propose giving the IRS an additional $80 billion and added authority in order to facilitate his plan to target high earners who avoid paying taxes, The New York Times reported Tuesday.
The enforcement is a key part of Biden’s plan to pay for his social infrastructure legislation, dubbed the American Families Plan. The effort is expected to cost at least $1 trillion, and is aimed at reducing inequality by making investments in affordable child care, paid family leave, free community college and other issues.
The Times reported that administration officials believe the IRS crackdown could raise as much as $700 billion over 10 years, paying for a chunk of the planned bill. Going after the gap between what businesses and taxpayers pay and what they actually owe has long been seen as an area to pursue by various administrations, and the Biden team argues the extra clout for the IRS could enable it to close the gap.
Biden is also planning to raise taxes on capital gains for people making more than $1 million and raise the tax rate on households making at least $400,000 annually to pay for his plan.
Citing two sources close to the issue, the Times reports that the added money and authority provided to the IRS would go along with new disclosure requirements for those who own businesses not organized as corporations and wealthy individuals who could be hiding income.
The Biden administration will be approaching this proposal as a way of leveling the playing field between average U.S. workers and high earners who use various, sophisticated methods to avoid or minimize the taxes they pay.
Biden is expected to speak about the plan when he addresses a joint session of Congress for the first time on Wednesday evening.
IRS Commissioner Charles Rettig told the Senate Finance Committee earlier this month that agency did not have the resources to track down tax cheats and, as such, audits on wealthier people have declined over the years.
The tax proposals have already stirred criticism from Republicans and some business groups, who argue it could hamper economic growth.
The White House defended the plans at a press briefing on Monday, emphasizing they would only be raising taxes on the wealthy.
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