IRS auditors catch tax cheats, collecting taxes from them, so firing IRS auditors increases the federal budget deficit by cutting tax revenue. Firing IRS auditors could also require tax increases on the law abiding, to make up for the lost tax revenue that results from more people cheating on their taxes.
Yet, the New York Post reports that up to 15,000 IRS probationary workers are expected to be axed in the middle of tax season, and that the “cuts could come as early as next week — just one month after the IRS began accepting tax returns.”
Both conservative and liberal economists agree that cutting IRS staff is generally a bad idea. As a news story in Politico observes, “Forecasters generally agree that beefing up tax enforcement is a money maker for the Treasury because auditors bring in far more cash than it costs to employ them.” The Congressional Budget Office has estimated that tax collections would rise by at least $207 billion if $80 billion more were spent over a decade in expanding the IRS’s enforcement staff. Others have estimated that tax collections would rise by $560 billion if $80 billion more were spent on tax enforcement over a ten-year period.
Similarly, an economist at the conservative Manhattan Institute notes that “Laying off thousands of IRS agents will worsen budget deficits. I understand the IRS is deeply unpopular, but the more we encourage tax evasion among high-earners and corporations, the more they’ll eventually need to raise your taxes to plug the gap.” That economist, Jessica Riedl, adds, “14 months ago, I published this Washington Post piece making the conservative case for IRS funding. Tax evasion contributes $625 billion to annual budget deficits, and the middle class will eventually get that bill. Everyone should play by the same rules.”
That Washington Post piece calling for more IRS funding was by the former “chief economist to Senator Rob Portman (R-OH),” who is also the former “lead research fellow on federal budget and spending policy” for the conservative Heritage Foundation, and also once “served as a director of budget and spending policy for Marco Rubio’s 2016 presidential campaign” and as “the lead architect of the 10-year deficit-reduction plan for Mitt Romney’s 2012 presidential campaign.”
It would be wrong to push for mass layoffs at the IRS, which is needed to fund the government (including funding our national defense, the courts, and those who prosecute crimes committed in federal enclaves). IRS auditors are needed to keep the budget deficit from rising further, at a time when the budget deficit is already a staggering $2 trillion.
