With Thanksgiving just around the corner, millions of families are struggling to find the right ingredients at a reasonable price to put on the table for their annual feast. Meanwhile, Democrats in Congress are cooking up a massive, sweeping tax and spending bill that will cause prices to rise even higher, making it harder for people to feed their families and burdening their children and grandchildren with a huge debt to pay far into the future.
The anticipated $1.75 trillion Build Back Better Act will make more people dependent on the government and harm the economy. On Nov. 5, House Democratic leaders attempted to bring the bill to the floor for a vote despite members of Congress not having sufficient time to read the legislation and the nonpartisan Congressional Budget Office not having enough time to report on the exact cost of the bill. Several “moderate” Democrats said they would not vote on the bill until there is a CBO estimate. And some of the provisions in this bill remain up in the air, while others are known to be troubling and reckless.
The most troubling aspect of the BBB Act is the increased size, scope, and power it gives to the IRS. While an earlier draft called for $80 billion for the IRS to hire about 87,000 new agents and improve outdated technology, that figure may now be closer to $50 billion. Regardless, an army of IRS agents spreading across the country to audit taxpayers to help close the tax gap will be very unwelcome guests at Thanksgiving dinner.
The IRS needs to update its information technology systems, which include ancient systems such as the 65-year-old Tax Master File. An August 2020 Treasury Inspector General for Tax Administration report found that 60%, or 231 of the 381 IT systems that it could adequately review, were “at least 25 years old, use obsolete programming languages (e.g., COBOL), or lack vendor support, training, or resources to maintain.” Prior efforts to upgrade systems have been abysmal failures and wasted billions of dollars, and that is the likely outcome of the substantial new expenditures.
The legislation also included a provision that would give the IRS unprecedented access to aggregate data on any bank account with more than $600 in transactions each year, regardless of the taxpayer’s tax status. While the threshold was changed to $10,000 annually by Democratic leadership, the bill will still give the IRS access to banking information on nearly every person who owns a small business, has any income, pays rent, or pays a mortgage. Given the IRS’s troubling history with wrongly targeting people based on their political views and the agency’s mishandling of private taxpayer data, taxpayers should trust the agency about as far as they can throw it.
The Tax Cuts and Jobs Act of 2017 set the state and local tax deduction at $10,000. However, the BBB Act proposes raising the cap to $80,000. Raising or eliminating the SALT deduction cap is a political gift to Democrats’ wealthy supporters in deep-blue states such as California, New York, and New Jersey. According to the Tax Policy Center, 90% of taxpayers claiming the SALT deduction earn more than $200,000 annually. While Democrats claim this provision would raise revenue to pay for this monstrosity of a bill, it would disproportionately benefit their wealthy voters and donors and would certainly not be considered a “progressive” policy.
President Joe Biden claims the Build Back Better Act “costs zero dollars” and doesn’t add to the deficit. However, it is a massive tax and spend turkey, which the CBO now estimates will add $367 billion to the national debt over 10 years. Democrats are so desperate to enact their agenda that they are relying on budget gimmicks, such as cutting the time for which the programs are funded in half, knowing they will be renewed.
People are already seeing the devastating impact of trillions of dollars in government spending from the $1.9 trillion American Rescue Plan Act on inflation through the higher prices for gas, groceries, heating, and everything else. Congress just passed a $1.2 trillion infrastructure bill, further increasing spending. Another $1.75 trillion (certainly an underestimate of the full cost) would have even more disastrous effects on the economy.
Eric Maus is a federal government affairs associate at Citizens Against Government Waste.
