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Brookings: Steven Mnuchin Makes a Welcome Case for Boosting IRS Funding

Fiddytree

Fiddytree

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I was surprised to hear this as well. John J. DiIulio and many other scholars and observers have been making the point that maintaining course in the government bureaucracy is wrongheaded. In essence, we need a great deal more federal bureaucrats, not less. One of the glaring reasons why DiIulio and others argued we needed to ramp up the bureaucracy was the IRS. Trump then instigated a freeze.

Mnuchin, our Treasury Secretary-in-waiting has argued that the IRS is "understaffed" and "under-resourced." Mnuchin, furthermore, stated that the IRS ought to be exempt from the hiring freeze.

It may not be popular to say, but the IRS needs more funding. Unpaid federal taxes are almost as large as the entire federal budget deficit. Money is being left on the table. People and businesses who don't pay what they owe are, in Trump's lingo, "making a killing." But when people don't pay their taxes, they are not just cheating the government. They are ripping off their neighbors. Adequately funding the IRS could raise revenues significantly and give the public assurances that the system isn't rigged in favor of the wealthy.

Adjusted for inflation, IRS funding in 2016 was the same as in 1998. As a result, IRS employment has fallen about 27 percent-by 30,000 workers-since then. These cuts have occurred at a time when the IRS is facing increasing challenges. Granted, the advent of electronic filing has reduced the burden on IRS workers per taxpayer, but the number of individual tax returns has increased by a third--from 123 million in 1998 to 163 million in 2015. The IRS is falling farther and farther behind in state-of-the-art computing. Many of its computer systems and programs belong in museums--they are running applications from the 1960s. Meanwhile, Congress has asked the IRS to take on new administrative and enforcement responsibilities, including those relating to health insurance subsidies under the Affordable Care Act, the American Opportunity Tax Credit, expansions of the Earned Income Tax Credit, and increased reporting requirements for assets held in offshore accounts under the Foreign Account Tax Compliance Act.

Lower funding combined with increased responsibility creates results that are only too predictable: worse taxpayer service and worse enforcement of the tax system.
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https://www.brookings.edu/opinions/steven-mnuchin-makes-a-welcome-case-for-boosting-irs-funding/
 
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Wow...sounds like he's taking his job seriously...in spite of his boss.

But I kinda like the IRS understaffed....that way they only have time to audit the big guys instead of the little guys
 
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Fiddytree said:
I was surprised to hear this as well. John J. DiIulio and many other scholars and observers have been making the point that maintaining course in the government bureaucracy is wrongheaded. In essence, we need a great deal more federal bureaucrats, not less. One of the glaring reasons why DiIulio and others argued we needed to ramp up the bureaucracy was the IRS. Trump then instigated a freeze.

Mnuchin, our Treasury Secretary-in-waiting has argued that the IRS is "understaffed" and "under-resourced." Mnuchin, furthermore, stated that the IRS ought to be exempt from the hiring freeze.



https://www.brookings.edu/opinions/steven-mnuchin-makes-a-welcome-case-for-boosting-irs-funding/
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There are several agencies that are understaffed and several that are overstaffed. When you combine the organizations that are overstaffed with the agencies that shouldn't exist at all, it still means we have way more bureaucrats than we need.
 
Moot said:
Wow...sounds like he's taking his job seriously...in spite of his boss.

But I kinda like the IRS understaffed....that way they only have time to audit the big guys instead of the little guys
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Chances are, it's the big guys that might get off way better.


"Collection and enforcement efforts have been hurt significantly. In*2015, the IRS audited only 0.8 percent of individual and 1.3 percent of corporate returns, compared to 1.1 and 1.4 percent respectively in 2010 and 1 and 2.1 percent respectively in 1998. The audit rate for households with income over $1 million has fallen by 40 percent since*2010."

"For example, only*1 percent*of income from wages and salaries is misreported. In contrast,*19 percent of partnership income and capital gains, and more than 60 percent*of sole proprietorship and farm income is not reported to the government. Although most noncompliance comes from misunderstanding the law, rather than outright criminal intent, the taxes should still be paid."

From Brookings article above.
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Moot said:
Wow...sounds like he's taking his job seriously...in spite of his boss.

But I kinda like the IRS understaffed....that way they only have time to audit the big guys instead of the little guys
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unfortunately, the cuts came primarily from the audit side of the house
as a result, one's chance of being audited fell appreciably ... especially among high earners

and those cuts were very much cost-unjustified
an auditor returned vast multiples of their annual expense to the US treasury. each loss of an auditor position cost the treasury hundreds of thousands of dollars in lost potential revenue
 
Fiddytree said:
"For example, only*1 percent*of income from wages and salaries is misreported. In contrast,*19 percent of partnership income and capital gains, and more than 60 percent*of sole proprietorship and farm income is not reported to the government. Although most noncompliance comes from misunderstanding the law, rather than outright criminal intent, the taxes should still be paid."
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Figuring out long term cap gains on stock you didn't purchase and wasn't transferred on death can be a real pain in the rear....
 
Oh Jeez.

There are roughly 80,000 employees at the IRS. That is absolutely ridiculous.

And now people want even more?

:roll:

Here is an idea - why not simplify the tax system so there are no deductions except charitable contributions and capital losses and make capital gains and income tax rates the same AND reduce the rates for the poor/middle class so those losses of deductions would not mean a higher tax bill.

Everyone with a properly working brain could do their taxes in five minutes and you could lay off about 75% of those 80,000 and save the taxpayers boatloads of money and hassle?


Oh..that's right...that is too logical. This is government we are discussing, after all.
 
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