Republicans’ IRS cuts to add $24 billion to the deficit, finds CBO

Washington, D.C.—While holding hostage the full faith and credit of the U.S. government, MAGA Republicans demanded $20 billion in cuts to the Internal Revenue Service (IRS), which the nonpartisan Congressional Budget Office (CBO) now finds will add $24 billion to the deficit—even more than previously reported. 

According to a new CBO report, prepared at the request of Senate Budget Committee Chairman Sheldon Whitehouse (D-RI), the net increase to the deficit is 24% larger than CBO had previously estimated. The increase is due to updates CBO made to its methodology based on new research. 

Chairman Whitehouse issued the following statement:  

“As MAGA Republicans again push the country to the brink of a government shutdown supposedly over deficit concerns, they also demand to slash IRS funding for cracking down on wealthy tax cheats — a $44 billion gift to their billionaire donors that will add $24 billion to the deficit.

“Republicans want wealthy tax cheat donors to rob the public with impunity.”

Key takeaways from CBO’s report include:

• Rescinding $20 billion from the IRS’s funding for cracking down on wealthy tax cheats would reduce revenues by $44 billion, adding $24 billion to the deficit.
• This estimate is 24% larger than CBO’s June estimate, which found that rescinding $21.4 billion from IRS enforcement (including the $1.4 billion that was passed into law by the debt limit agreement) wouldadd $19 billion to the deficit. The update is based, in part, on recent research that found wealthy tax cheats who had been audited were more likely to voluntarily comply in future years.
• Looking beyond the 10-year budget window, the $20 billion rescission would reduce revenues by a total of $51 billion, increasing the deficit by $31 billion.

CBO provided three estimates of different funding cuts to IRS enforcement:

Chairman Whitehouse has long focused on IRS efforts to crack down on wealthy tax cheats, including holding a hearing on new research—now part of CBO’s methodology—showing greater returns on investment from IRS enforcement.

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