To
understand why the IRS is under attack, follow the money.
By Josh Hoxie
It’s no secret that House Republicans don’t like the Internal
Revenue Service.
They’ve once again proposed cutting the agency’s already
beleaguered funding, and they recently held a hearing to impeach its commissioner, John
Koskinen.
Koskinen’s alleged misdeeds stem from the now four-year-old
allegations that the agency singled out conservative groups’ tax-exemption
applications for scrutiny.
While an exhaustive investigation of the “scandal” did show
mismanagement — for which the former chief, Lois Lerner, eventually stepped
down — it turned up no evidence at all that the IRS targeted conservative
groups for political reasons. And Koskinen himself didn’t even work for the IRS
at the time.
In all likelihood, Koskinen’s persecution is part of a larger
push by House conservatives to discredit the tax collection agency and pare
down its funding.
A recent report from the Center on Budget and Policy Priorities
shows IRS funding has been cut 17 percent since 2010, with disastrous impacts
on the agency’s staffing levels.
These cuts haven’t just hurt the agency’s customer service, as
anyone who tried to call the IRS last year could have told you. It’s
made it much harder for the federal government to collect the money it needs to
function.
So what’s behind all the animosity?
Some, like Rep. Darryl Issa (R-CA) — who’s both the wealthiest member of Congressand a leading member of the
impeachment effort — fit into both camps.
The financial argument is perhaps the simplest to understand: A
weak IRS helps the wealthy avoid paying taxes.
A New York Times story late last year outlined how the
richest Americans have spent millions shaping the tax code in their favor.
Underfunding the IRS makes it easier for their accountants and lawyers to
exploit loopholes and tax havens to ensure they don’t pay the full tax rate the
law requires.
And it’s paid off. In the past 20 years, the Times reported,
the wealthiest 400 families have seen their average effective tax bill drop by
over a third.
These financial interests stand behind — and often sponsor — the ideological push to undermine the IRS
for its own sake. Hedge fund titans like Daniel Loeb, Louis Bacon, and Steven
Cohen have all both benefited from the weak tax enforcement, and invested in it
through their political and charitable donations.
Grover Norquist, the tax-hating president of Americans for Tax
Reform, has for decades led an effort to — in his words — “shrink government to
where I can drag it into the bathroom and drown it in the bathtub.” And the
most effective method for shrinking government is to starve it of the necessary
revenue to fund public programs.
This anti-tax faction, once a fringe movement, now makes up the
mainstream of the Republican Party.
One telling sign: Nearly 1,400
elected officials — including nearly all the Republicans in
Congress — have signed Norquist’s pledge to oppose any increase in taxes.
They’ve won significant victories, not least of which has been to demonize the
IRS to the point that it’s consistently ranked among the least popular federal agencies.
The impeachment effort against Koskinen is dead on arrival in
the Senate, and the bill to strip more IRS funding won’t survive a veto if it
makes it to President Obama’s desk. But the bigger fight over taxes — and the
agency tasked with collecting them — appears here to stay.
As Norquist put it, “You win on the tax issue, you win all
issues.”
Josh
Hoxie directs the Project on Opportunity and Taxation at the Institute for
Policy Studies. Distributed by OtherWords.org.