By a 2-1 margin, voters believe additional IRS funding for auditing and tax law enforcement will impact the middle-class, despite Democrats’ claims that it would be aimed at the wealthy. According to a new poll by HarrisX, 58 percent of voters believe that the Democrats’ plan to supersize the IRS would impact the middle class, compared to just 23 percent who believe it’d be limited to the wealthy.
Out of nearly $80 billion in new IRS funding in Democrats’ reconciliation bill, $44.9 billion, more than half, will go directly towards “enforcement.” The agency will receive a comparatively meager $1.93 billion in funding for “taxpayer services” which include things like pre-filing assistance and education, filing and account services, and taxpayer advocacy services. That is a 23-1 ratio of spending on “enforcement” vs. “taxpayer services.”
President Biden and congressional Democrats have claimed that this increase and enforcement will be limited to the wealthy.
Respondents were asked the following:
Do you think the additional IRS funding for auditing and tax law enforcement, which is supposed to be aimed at wealthy, would be limited to that group or would the middle class also be impacted?
58 percent of respondents said that increased enforcement will impact the middle class, while just 23 percent believed it would be limited to the wealthy.
Voters in key demographics agreed that the additional funding would impact the middle class:
- 76 percent of Republicans
- 56 percent of independents
- 65 percent of male voters
- 52 percent of female voters
- 59 percent of voters with 4+ years of post-high school education
- 61 percent of suburban voters
- 61 percent of rural voters
The poll-takers are correct, as the bill will fund 1.2 million more annual IRS audits; about half will hit households making less than $75k.
As previously reported by CNBC, experts say a fattened-up IRS would go after small businesses that necessarily depend on cash transactions:
Certain small businesses may face an audit under the plan. “I think the industries that should be concerned are those in cash,” said Luis Strohmeier, a Miami-based CFP and partner at Octavia Wealth Advisors.
[He expects the agency to scrutinize cash-only small businesses like restaurants, retail, salons and other service-based companies.]
The wealthy and large corporations already have armies of lawyers and accountants that ensure they legally take advantage of the plethora of credits and deductions offered by the tax code. Further, the IRS already audits the largest corporations at high rates.
The IRS will go after easier targets to find this money instead: businesses and individuals without legal teams and accountants. New IRS enforcement will fall on American families and small businesses, not the “rich.”
The poll was conducted between November 29 - December 1 among 1,848 registered voters. The sampling margin of error of this poll is plus or minus 2.3 percentage points and results reflect a nationally representative sample of registered voters.