Every time I hear the letters IRS (Internal Revenue Service) it reminds me of a scene from the movie “The Producers” – 2005 staring Nathan Lane, Mathey Broderick, Will Farrell & Uma Thurman. In the scene the police barge into the office of Bialystock & Bloom and find 2 books for tax purposes. One book labeled “Show the IRS” and the second labeled “Don’t Show the IRS”. A hilarious remake of the original Mel Brooks movie overall. Possibly like many, I grew up in a household that feared the IRS. Especially my mother. Every time they received a notice or letter from the IRS, panic & fear set in. That feeling for many households transitioned to hatred in the 70’s, 80’s & 90’s. Today maybe not so much.
Take this information into account.
Internal Revenue (Definition): The revenue of a government from any domestic source usually considered to be any source other than customs. (dictionary.com)
IRS Mission: Is to provide American’s taxpayers top quality service by helping them understand and meet their tax responsibilities and to enforce the law with integrity and fairness to all. (IRS.gov)
A simpler explanation (for people like me): the job of the IRS is to collect revenue for the U.S. Government, so the U.S. Government can pay its bills. If you reduce the revenue the IRS brings in, then you reduce the amount the U.S. can pay against its debts, and the debt increases. I think there are many Americans who can relate to that balance sheet. The 3 biggest expenses in the Federal Government; Healthcare, Social Security, Defense (cbo.gov).
The IRS is part of the U.S. Department of Treasury and is responsible for enforcing & administering federal tax laws, processing tax returns, performing audits and offering assistance to American taxpayers (Taxfoundation.org). In 2020 the IRS collected almost $3.5 trillion dollars in revenue (doing its job) and processed more than 240 million tax returns (IRS.gov). The IRS spent just .35 (cents) for each $100 it collected in 2020 (IRS.gov). In 2023 the Government spent $6.13 trillion dollars, which is more than it collected (revenue) resulting in a deficit (fiscaldatatreasury.gov).
Discretionary Spending (D): spending determined by the President & Congress in each budget and includes spending on most defense, education & transportation.
Mandatory Spending (M): spending is dictated by laws and includes spending entitlement programs like social security & Medicare.
FYTD 2024 Federal Spending by category (no I can’t explain each category, I can only assume)
- 25% Social Security (M)
- 19% National Defense (D)
- 16% Net Interest – I assume on loans (M)
- 15% Healthcare
- 7% Income security
- 5% Medicare (M)
- 5% Education, Training, Employment, Social Services (D)
- 4% Commerce & Housing Credit
- 3% Veterans benefits & services
- 2% Transportation (D)
- -1% Other
Another way to look at it: If you reduce the revenue the IRS brings in, then you reduce the amount the Government can spend on social programs, yes social programs. Programs that many of us have or will benefit from at some point. Not Socialism, because as I have said before we don’t have that because it is not built into our constitution (the thing we govern ourselves by). The largest portion of the Governments revenue is spent on Social Security & Medicare. Both are mandatory outlays by the Federal Government. (Wikipedia.org)
Lately I have heard some legislators calling for a reduction in funding to the IRS. Me personally, as much as I (and assume most folks) don’t like paying taxes, it is a necessity for how our country operates and pays for things. Keep in mind, The pre-amble to the Constitution says “………………to establish JUSTICE, ensure DOMESTIC TRANQUILITY, provide for the COMMON DEFENSE, promote GENERAL WELFARE, and secure the BLESSINGS OF LIBERTY to ourselves and or posterity.” All achieved through Government spending.
In my opinion, reducing funding to the IRS would reduce the number of employees they have, thus reducing the number of tax returns they can audit, thus reducing the income generated for the country. With less employes, they would focus on a reduced number of tax returns, focusing on the less cumbersome tax returns (those of middle- & lower-class people), and allowing corporations and some very wealthy individuals to take advantage of the tax system. I’m not against corporations or the wealthy. I just don’t want a decision made by our legislators to have an adverse effect on those they say, they care so much about. I’m not confident that the IRS whom only spends .35 cents for every $100 dollars collected would have the ability to collect as much money as they do now with a reduced budget. Not possible.
What will happen when you cut the budget to the IRS:
- They collect less revenue, reducing the funding they have on discretionary programs. Only allowing them to pay for mandatory items. But remember, we take in less than we pay out. People who need, will go without the support they need, and the gap between those that have, and those that don’t grows.
- The deficit grows, but who cares, because we will blame whomever the President is at the time and continue to kick the can down the road. It is just like immigration. There is a fix, just no one wants to implement it. Then there would be nothing for our legislators to do or blame the other party for. If you keep things in disarray, then there is purpose behind the work you do.
- Forces the current administration to make budget cuts, forcing the administration to pull from one program to fund another. It is a death spiral.