Saturday, April 15, 2023

CNBC explains 'Why The IRS Is Still Struggling To Fund The Government' for Tax Day

"Happy" Tax Day, at least for my readers in the U.S.! I'm observing the day by sharing CNBC explaining Why The IRS Is Still Struggling To Fund The Government.

The Internal Revenue Service brings in approximately 96% of the federal government’s funding every year. In fiscal year 2021 alone, the IRS collected $4.1 trillion dollars in gross taxes. But funding for the agency declined by more than 20% between 2010 through 2019 when adjusted for inflation. This budget squeeze corresponded with a decline in tax audit rates across all income brackets, with the highest earners seeing the largest percent change. In August 2022, President Biden signed the Inflation Reduction Act into law, which set aside nearly $80 billion for the IRS to be used over the next 10 years. Watch the video above to learn more about how the IRS works and how budget cuts have affected the agency.
Why am I not surprised that the "Satan Sandwich" budget sequestration deal and 2017 tax bill both played major parts in the shrinking of the IRS, that the Inflation Reduction Act is restoring that lost funding and staffing, and that the Republicans in Congress are seeking to reverse the IRA's increased funding of the IRS as part of raising the debt ceiling? Because I've been watching Washington long enough to see history rhyme, if not repeat. The situation resembles 2011 with a Democratic President and Senate and a Republican House, and the "Satan Sandwich" came out of that. Ugh. May we not get what I feared twelve years ago, when I channeled Monty Hall.
“Ladies and gentlemen, it’s time for today’s Big Deal. Today’s Big Winner can keep the sugar-coated Satan sandwich he just won, or he can trade it in for what’s behind our three doors. Behind one of them is a clean raising of the debt ceiling and the expiration of the Bush tax cuts. Behind another is a balanced budget amendment. Behind the third is a sovereign default. So, Big Winner, will you keep your prize, or trade it in for what’s behind Door #1, Door #2, or Door #3? Which do you choose?”
I followed up the next day by writing "We decided to keep the Satan Sandwich...Maybe next time we'll pick what's behind Door #3." Good lord, I hope not, but it looks more likely than a dozen years ago.

Stay tuned for the Sunday entertainment feature in the form of the highlights of tonight's "Saturday Night Live" episode. I plan on following that with another post about taxes, since the tax filing deadline is really April 18th. In the meantime, I leave my readers the following meme, which I use whenever the U.S. is about to bump its head on the debt ceiling.

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