[guest post by JVW]

Remember the Democrats demanding that $80 billion in additional money be allocated to the IRS over a ten-year period so that all of those super-wealthy tax-cheats can be tacked down and forced “to pay their fair share”? They got most of what they wanted in the end, and despite the Biden Administration’s claims that the money would be used for technology modernization and for “taxpayer services,” over half the money ($45.6 billion) went to “tax enforcement” (read: hiring new agents, lawyers, and bureaucrats) and another huge chunk ($25.3 billion) went to “general operations” (read: new office buildings, travel budgets, etc.).

But hey, at least the IRS recouped tens of billions of dollars in the first couple of years, suggesting that this program will pay for itself in short order, right? Yeah, not so much:

The IRS in February 2024 launched an initiative to pursue 125,000 high-income, high-wealth taxpayers who have not filed taxes since 2017. [. . .] In the first six months of this initiative, nearly 21,000 of these wealthy taxpayers have filed, leading to $172 million in taxes being paid.

The IRS in the fall of 2023 launched a new initiative using Inflation Reduction Act funding to pursue high-income, high-wealth individuals who have failed to pay recognized tax debt, with dozens of senior employees assigned to these cases. This work is concentrated on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt. The IRS was previously unable to collect from these individuals due to a lack of resources. After successfully collecting $38 million from more than 175 high-income, high-wealth individuals last year, the IRS expanded this effort last fall to around 1,600 additional high-income, high-wealth individuals. Nearly 80% of these 1,600 millionaires with delinquent tax debt have now made a payment, leading to over $1.1 billion recovered. This is an additional $100 million just since July, when Treasury and IRS announced reaching the $1 billion milestone.

So there you have it: in the first year this $80 billion “investment” over ten years has yielded gains of about $1.3 billion. Let’s say that number manages to grow at a robust 35% annually in years 2 through 10. That would only yield a net ten-year return of $76 billion, still below the money allocated for this ridiculous undertaking. And who among us expects the amount recouped to grow by 35% a year for a whole decade?

Democrats of course pinky-promised that this initiative would only apply to those with annual incomes of over $400,000 per year. How long do you think it will be until the IRS, desperate to justify the huge windfall which thus far has failed to show any kind of return on investment, will start going after the taxpayers making over $250,000 and, if they can get away with it, eventually pretty much anyone making $100,000 or even less?

And so the next ridiculous promise from the donkey party is to tax unrealized gains. But honestly, dear taxpayer, we are only gonna do that for the very rich, so those of you middle class folks who through years of careful budgeting and avoiding frivolous purchases may have built yourself a nice little portfolio have nothing to worry about. For now.

In our insipid political climate, both sides are proposing middle class tax “relief” and expanded child credits, with no real plan for dealing with our continuing annual $2 trillion deficits and $35 trillion federal debt. One side insists that these tax cuts will unlock so much economic activity that they will pay for themselves; the other side claims that they can offset the cost of these tax cuts by making others back-fill the sums. Both of them are full of bullstuff.

– JVW