Biden pledges to veto House Republican bill that would slash IRS funding

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The government would lose an estimated $185 billion in tax revenue over the next decade if the bill became law.

President Joe Biden said he would veto the first bill passed by the newly Republican-led House of Representatives, which would significantly cut funding for the Internal Revenue Service.

House Republicans on Monday passed the Family and Small Business Taxpayer Protection Act by a vote of 221-210 along party lines.

The bill would repeal a portion of the 2022 Inflation Reduction Act, passed by Democrats in Congress, that gave $80 billion to the IRS to increase enforcement, modernize internal systems, and replace retiring employees. The government would lose an estimated $185 billion in revenue over the next decade if the bill became law due to a lack of financing for infrastructure to ensure that individuals and businesses pay the taxes they owe.

Republicans in Congress have repeatedly mischaracterized how the new IRS funding would be used, and have falsely claimed that IRS auditors would be targeting middle-class taxpayers, even suggesting that most of the agents would be armed.

"House Republicans just voted unanimously to repeal the Democrats' army of 87,000 IRS agents," House Speaker Kevin McCarthy wrote on Twitter after the vote.

A fact check by PolitiFact found the claims about the IRS made by McCarthy and other Republicans to be "mostly false."

In reality, after Biden signed the new funding into law in August, Treasury Secretary Janet Yellen sent a memo to IRS Commissioner Charles Rettig instructing him to begin developing a plan for implementation that would help to "end the two-tiered tax system, where most Americans pay what they owe, but those at the top of the distribution often do not."

The Biden administration voiced its opposition to the House Republican bill in a statement on Monday, saying:

This reckless bill would increase the deficit by nearly $115 billion over 10 years per an estimate by the Congressional Budget Office by enabling wealthy tax cheats to engage in additional tax fraud and avoidance. … With their first economic legislation of the new Congress, House Republicans are making clear that their top economic priority is to allow the rich and multi-billion dollar corporations to skip out on their taxes, while making life harder for ordinary, middle-class families that pay the taxes they owe.

Vice President Kamala Harris also criticized the legislation, noting in a statement that the bill would "allow too many millionaires, billionaires, and corporations to cheat the system."

The bill is unlikely to receive a vote in the Senate, which is controlled by Democrats.

"House Republicans want to help large corporations and multi-millionaires avoid paying their fair share of taxes. Democrats won't let it happen," Senate Majority Leader Chuck Schumer tweeted after the bill's passage.

Published with permission of The American Independent Foundation.