The Congressional Budget Office (CBO) found Thursday that increased IRS enforcement funding in the Build Back Better Act would raise only half of the tax revenue the Joe Biden White House estimated.
The CBO released its estimate of the Build Back Better Act’s $88 billion in increased funding for the IRS to increase its audit enforcement.The CBO found that the bill would on net decrease the deficit by $127 billion through 2031.
Biden and congressional Democrats hoped to use the increased IRS funding as a major revenue source to offset the cost of the allegedly $1.75 trillion Build Back Better Act, although some estimates pin the cost of the bill higher at $4.91 trillion.
The CBO also found that it would take roughly two and a half years for the IRS to scale up hiring with the increased funding if the Build Back Better Act were to pass. The CBO wrote:
CBO estimates that an audit of medium complexity would take 24 months to complete. That time, combined with the expected training time for an experienced new hire, suggests that the IRS would begin to collect revenues 30 months after the new hire joined the agency.
White House deputy press secretary Andrew Bates said that with the extra $88 billion in funding it could raise as much as $400 billion in extra tax revenue.
Bates even discounted the CBO’s experience in tax revenue.
He said this week, “CBO doesn’t have experience analyzing revenue amounts gained from cracking down on wealthy tax cheats who are taking advantage of every honest taxpayer.”
However, CBO Director Phillip Swagel said during an event at the Bipartisan Policy Center Monday that the agency does have the experience to score how increased IRS funding could impact tax revenue. Swagel also noted that many CBO officials have also worked at the Treasury.
“It’s not that you put more money into the service and you actually lose money,” Swagel said. “It’s not that at all. But it does affect the behavior of people on the other end of the IRS.”
The CBO director said that having more audits would lead many companies and high-income earners to get more aggressive when faced with higher taxes.
Other fiscal organizations found similar results.
The Committee for a Responsible Federal Budget found that this provision would generate $125 billion in net revenue.
Sean Moran is a congressional reporter for Breitbart News. Follow him on Twitter @SeanMoran3.