Grassley criticizes Biden’s proposal to provide IRS with $80B

Sen. Chuck Grassley (R-Iowa) on Monday criticized President Biden’s proposal to provide the IRS with $80 billion for enforcement and other purposes, saying that the administration’s plan would increase burdens on small businesses.

“Iowans need to know Biden’s $80 billion price tag means greater burdens, especially on small businesses already hanging by a thread to recover from the pandemic,” Grassley, who served as chairman of the Senate Finance Committee during the previous Congress, wrote in an op-ed in the Des Moines Register.

Biden last month proposed as part of his American Families Plan to provide the IRS with $80 billion over 10 years to fund priorities such as updating the agency’s technology and hiring auditors who would focus on investigating wealthy individuals and corporations. The White House is also proposing to require financial institutions to provide additional information to the IRS, in an effort to help the agency better target its enforcement activity toward taxpayers who are most suspicious.

The Biden administration has said that the proposals would help the IRS to go after tax evasion and would generate an additional $700 billion of net tax revenue, which would help to pay for Biden’s proposed investments in areas such as child care and education. 

The Register’s editorial board, which endorsed Biden in 2020 and also endorsed Grassley in his 2016 Senate race, wrote an editorial last week that supported Biden’s plan to boost IRS funding and that called for Grassley to “be leading the charge to ensure tax scofflaws are pursued.”

Grassley responded in his op-ed that he has a long history of working to hold accountable those who cheat on their taxes, and that he wants to reduce the “tax gap” between the amount of taxes owed and the amount voluntarily paid. But he also argued that “history has shown that simply throwing money at a problem doesn’t necessarily yield a solution.”

Grassley said that some experts think that the administration is overestimating the amount of revenue that would be raised from its proposal to boost IRS spending. He also said that under Biden’s proposals, businesses would face burdensome compliance costs and reporting requirements.

“Instead of promising a chicken in every pot, Biden’s plan promises an auditor at every kitchen table,” Grassley wrote.

Grassley also wrote that the IRS has a “trust deficit,” arguing that the agency at times has wasted taxpayer dollars.

“Americans are right to be wary about further investment in the IRS without significant controls,” he wrote.