Biden’s policy aids IRS in collecting $851B from ultra-rich tax debts
TL/DR –
The Internal Revenue Service (IRS) is set to collect hundreds of billions of additional tax revenue from the ultra-wealthy, thanks to funding from the Inflation Reduction Act. Tax revenues are expected to rise by as much as $561 billion from 2024 to 2034 due to increased enforcement. If this funding is renewed, the additional revenues could reach as much as $851 billion, as the Biden administration has proposed.
Funding from Biden’s Inflation Reduction Act Boosts IRS Revenue Collection
The Internal Revenue Service (IRS) is set to collect additional tax revenue from the ultra-wealthy, facilitated by President Biden’s Inflation Reduction Act (IRA) funding.
Treasury Department Estimates Significant Rise in Tax Revenues
Estimates from the Treasury Department and the IRS suggest tax revenues could climb by as much as $561 billion from 2024 to 2034, due to greater enforcement enabled by the IRA. This could rise to $851 billion if IRA funding is renewed.
IRS Collections from the Wealthy Exceed $520 Million
Benefiting from the 2022 law’s funds, the IRS has collected over $520 million from 1,600 millionaires with unpaid tax bills surpassing $250,000. The agency emphasizes its focus on wealthy individuals and businesses with overdue taxes, excluding families earning under $400,000 annually.
Biden’s Tax Fairness Initiative
President Biden’s agenda includes making the tax system fairer and introducing a billionaire tax, while promising no tax hikes for families earning less than $400,000 per year.
Republican Efforts to Cut IRS Funding Amid Tax Loopholes
As Republicans attempt to slash IRS funding, revelations of a tax loophole allowing the wealthiest Americans to hoard $8.5 trillion in untaxed profits in 2022 have come to light.
IRS Funding Cuts and the Inflation Reduction Act
During the 2021 debt ceiling talks, House Republicans negotiated approximately $20 billion in cuts from the original $80 billion allocated to the IRS under the IRA.
IRS Challenges and the Tax Gap
The IRS faces significant challenges in tax collection, with a tax gap (the difference between taxes owed and paid) exceeding $600 billion annually.
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