There is something inspiring about the annual civic ritual that played out on Tuesday. Millions of people submitted tax forms, poring over details to get them just right, even though very few will ever be audited. They were dutifully, if not necessarily cheerfully, paying the price of admission into a civilized society.
Still, we’re not so naive as to believe that compliance would be unchanged if cheaters were never caught. That is one reason President Donald Trump’s proposal to slash Internal Revenue Service funding is such an abysmal idea. The president last month suggested reducing the national tax collector’s $11.2 billion budget by $239 million – this after Republicans already have cut $1 billion from its budget since taking over Congress at the beginning of this decade.
Attacking the IRS is a particularly expensive way to play to the crowd. It rewards tax cheats at everyone else’s expense. Commissioner John Koskinen estimates that the government loses at least $4 for every $1 cut from the IRS and is losing some $4 billion to $8 billion a year due to inadequate funding.
The agency’s work force has contracted by some 17,000 employees in recent years while demands on the agency, from preventing identity theft to enforcing Obamacare’s individual health-insurance mandate, have expanded. Fewer employees means less enforcement: Last year the agency conducted the fewest audits since 2004 – when the U.S. population was about 30 million smaller, the Associated Press notes – and its audit rate has declined to a point not seen since 2003. The more the integrity of the tax oversight system comes into doubt, the more tax-day shenanigans people will attempt.
Fewer IRS employees also means worse customer service. Though by some measures service has improved over the past year, it is still far below what it should be. Some callers needing help still have trouble getting through to live people in a reasonable amount of time.
“I was particularly surprised that at looking at the IRS numbers that the IRS head count has gone down quite dramatically, almost 30 percent over the last number of years,” Steven Mnuchin said in his confirmation hearings as treasury secretary. “I can assure you that the president-elect understands the concept of where we add people and we make money,” he said. “That’s a very quick conversation with Donald Trump.”
It may have been quick, but apparently the logic was not as self-evident as Mnuchin expected. The country will quite literally pay.