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Catherine Rampell

Trump’s gift to Americans: making it easier to cheat on their taxes  

Published on: March 13, 2017 4:02 AM

 

President Trump is finally doing something practical to help his fellow Americans: He’s making it easier for them to cheat on their taxes. Especially those who – like Trump – happen to be super rich. The Trump administration wants to lop off another 14.1 percent from the Internal Revenue Service’s budget, according to a recent New York Times report. This would compound years of cuts by Republican Congresses and leave the beleaguered agency’s budget 29 percent below its fiscal 2010 level, in inflation-adjusted terms – even though the IRS has more responsibilities than it used to, given multiple complicated new laws and the rise of taxpayer identity theft and cyberattacks. Americans love to hate the IRS, especially when April 15 approaches. But schadenfreude aside, chopping the agency’s budget is completely wrongheaded, especially if you’re truly a fiscal hawk who loves “law and order.” It actually costs the government lots of money. As the government’s main revenue collection agency, the IRS brings in several dollars for every one dollar it spends. Don’t believe me? Just ask Trump’s treasury secretary, Steven Mnuchin. During his Senate confirmation hearings, Mnuchin argued that the IRS was underfunded and understaffed. He said he was “surprised” to learn the agency’s head count had fallen 30 percent in recent years, which appears to be a reference to staffing in key IRS enforcement positions. “I don’t think there’s any other government agency that has gone down 30 percent, and especially for an agency that collects revenues, this is something that I’m concerned about,” he said. He added that Trump would have no problem grasping the shortsightedness of further cuts. “I can assure you that the president-elect understands the concept of ‘we add people, we make money,'” Mnuchin said. “That’s a very quick conversation with Donald Trump.” Either Trump is not as fast a learner as Mnuchin claimed, or someone else is setting fiscal policy in this administration. In any case, as Mnuchin surely knows, there are at least two major reasons why IRS spending offers a high return on investment. The first is the agency’s work promoting voluntary tax compliance, through which the vast majority of revenue is collected. The tax code is extremely complicated (a flaw for which you should fault Congress, not the IRS), and Americans need help to make sure they’re paying what they owe. Each year, the IRS receives more than 5 million visits at its walk-in sites, 10 million letters and 100 million calls from taxpayers.

Filed Under: Business

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