GOP Wants IRS To Ignore Rich And Corporate Tax Cheats, Focus On Poor

It’s pretty hard not to believe Republicans simply hate the poor for simply being poor. From Romney’s 47% to Ryan’s “takers”, from Reagan to Trump, the poor are always depicted as grifters and freeloaders. But it is pretty rich (well, we are talking about Republicans) to see the GOP desperately trying to provide massive tax cuts for business and the wealthy while attacking probably the most important program that lifts low-wage workers out of poverty and into the workforce.

Catherine Rampell has the scoop on the plan to have the IRS conduct a mini-audit on every return that seeks the Earned Income Tax Credit (EITC) before refunding those claims. Considering there are around 28 million EITC claimants, you can imagine just how much time, money, and effort this is going to cost the IRS. Of course, that is time, money, and effort not going after the real tax criminals who are mostly businesses and rich people. Although some fraud has been detected, the amount of time that the IRS already devotes to vetting EITC returns is inordinate and not cost effective. Of all IRS audits, 39% already go to EITC investigations, yet the recovered amounts only come to 7% of the total amount of additional taxes that are owed to the IRS each year.

The EITC has been remarkably successful in not only keeping low and moderate wage earners and their families out of poverty but has also increased workforce participation, especially among the number of single mothers seeking employment. In the past, there was bipartisan consensus to support the program and both parties recognized its effectiveness. But not these days, when the Republican party has completely gone off the rails. Of course, this plan also flies in the face of Paul Ryan’s farcical “tax simplification” plans, but when has consistency ever been required from Republicans.

As Rampell notes, this potential change will also add to the deficit, creating a remarkable twofer by Republicans – “punish the poor and simultaneously increase budget deficits — all with one nifty trick!” The real goal, of course, “is to discourage poor people from applying for the EITC in the first place.” Then there would be more money for tax cuts for the rich.