A New York Times column titled “The Rotten Core of the Republican Party” misleadingly repeats key arguments by President Biden and Democrats on Republican tax reform and President Biden’s IRS surveillance scheme that targets blue collar workers, families, and small businesses–claiming that “tax avoidance” is the “rotten core of Republican Party.” Far from it. Here are the facts:
False Claim: “Democrats want Americans to pay the full amount they owe in taxes. What doesn’t get enough attention is that many Republicans seem not to agree.”
- The Tax Cuts and Jobs Act (TCJA) simplified the tax code and led to lower tax rates for every income level, while increasing the share of federal taxes paid by the wealthy.
- Under tax reform, Republicans made it easier than ever for hardworking Americans to pay their taxes by eliminating the stress and burden of itemizing for 90% of taxpayers.
- The bottom line: Republicans believe everyone should pay their taxes.
False Claim: “Republicans sharply reduced federal income tax rates imposed on wealthy people and big companies…”
- Under TCJA, individual income tax revenue increased by 27.5 percent, with 80 percent coming from the top 10 percent of earners. Corporate tax revenues increased by 75 percent to an all time high.
- According to the U.S. Chamber of Commerce the majority of the more than 30 million small businesses in the U.S. are pass-through entities in which tax obligations are passed to the owners–which Democrats then describe as the rich. And 1.4 million of them are organized as C corporations and thus subject to the corporate tax.
- Democrats’ tax hikes will damage small businesses who are already struggling with record job openings, and because businesses don’t pay taxes but rather collect them, the damage will fall on Americans and retirees in the form of lower wages, fewer benefits, and higher prices.
False Claim: “Republicans are aiding and abetting tax evasion.”
- The IRS commissioner has said himself that the best way to improve enforcement is simplify the tax code.
- But now Democrats are fighting for a tax shelter for wealthy Americans in restoring tax havens for colleges with massive endowments, Green New Deal subsidies for electric bikes and vehicles, and in their restoration of a SALT tax carveout for the rich.
- None of these tax breaks go to the 90 percent of Americans who don’t itemize their taxes, so occupants of the penthouse cheer while the building janitor gets nothing.
False Claim: “When the rich and powerful open loopholes in the tax code, Republicans reliably fight to keep the loopholes open.”
- In tax reform, Republicans focused on closing special interest loopholes so that every American could keep more of what they earn in their paychecks. Democrats want to reintroduce loopholes and create entirely new ones.
False Claim: “Republicans have hacked away at funding for the Internal Revenue Service over the past decade, enfeebling the agency.”
- Republicans and Democrats on a bipartisan basis passed a major reform of the IRS called the Taxpayer First Act in 2019. Reform of the IRS is a bipartisan effort.
- Democrats’ $80 billion bank surveillance scheme targets farmers, families, and small businesses.
- Every American must pay their taxes, but there’s very little evidence suggesting the IRS estimate on unpaid taxes (dubbed the “tax gap”) is accurate, given that it may be based on data from seven years ago (before tax reform) or wild guesses on foreign transactions, cryptocurrency, concealed income, and other sectors.
- Ways and Means Republicans introduced a bill prohibiting the Biden Administration’s plan to turn local banks into chapters of the IRS.
- Republicans have also introduced the Tax Gap Reform and Internal Revenue Service (IRS) Enforcement Act, which allows for a better understanding of the tax gap, provides smarter enforcement, ensures the IRS uses all of the resources at its disposal, and addresses the expertise gap at the IRS.