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  • Writer's pictureHagan Capital Team

Cancel the IRS?

Should The IRS Be Abolished?

Recently the 118th Republican-led Congress introduced “The Family and Small Business Taxpayer Protection Act.” If successful, the bill would abolish the IRS, replacing the income tax (and the income tax code) with a consumption tax and rescinding nearly $71 billion of recent IRS funding. The bill passed the House on Jan. 9 and now lingers in the Senate.

The White House has threatened to veto the bill. A consumption tax—or fair tax—has been discussed for as long as I can remember, but now the idea is picking up speed.

While abolishing or attempting to abolish the IRS is a massive undertaking, this is a step in the right direction and a crucial signal that Congress is finally sending to conservative voters. American citizens, politicians, legal scholars, and financial scholars have long questioned the legal authority of the IRS. In the late 1800’s income tax in America was widely considered a socialist confiscation of wealth, and even the Supreme Court declared such taxation unconstitutional.

Below are a few key themes of the bill from the House Ways and Means Committee:

● Democrats voted to supercharge the IRS with a massive infusion of taxpayer dollars focused on IRS enforcement and the hiring of 87,000 new IRS agents to squeeze American taxpayers.

● Republicans fought for guardrails to protect middle and lower-income taxpayers from increased audit scrutiny—Democrats rejected these protections.

● According to CBO, the Democrats’ supercharged IRS will cause audit rates to “rise for all taxpayers” and a conservative analysis shows that returning audit rates to 2010 levels would mean 1.2 million more audits, with over 700,000 of those falling on taxpayers making $75,000 or less.

● Democrats have long used the IRS and the tax code as a political weapon and will lead to more IRS abuses like those we’ve seen in the past: ○ Targeting of Tea Party and conservative groups during the Obama administration. ○ Seeking a bank surveillance scheme on all American bank accounts. ○ Massive leak of information to ProPublica used to support Democrat causes. ○ Unleashing a dangerous new political weapon through the public release of the former president’s private tax returns.

● Americans deserve a government that’s accountable and one that works FOR them, not AGAINST them. Rescinding funding for 87,000 new IRS agents is a great first step in the right direction. Continued blunders by the IRS have only deepened the partisan divide.

Apart from the mishaps during the Obama administration and the continued politicization of the IRS, late last year, the Democrat-controlled Ways and Means Committee took an unprecedented move and released former President Donald Trump’s tax returns.

The release of Trump’s tax returns has created an uncontrollable ripple effect; releasing a former president‘s tax returns is unfathomably shocking and undoubtedly political.

While Congress’s Ways and Means Committee is within its right to release individual tax returns, no one expected it to happen.

Throughout the past century—it seemed—the IRS and the Ways and Means Committee have held confidentiality in high regard.

If you can’t trust Congress or the IRS, how can you be assured Congress and the IRS will safeguard your identity, social security number, and personal finance information? How can you be sure the IRS won’t share important personal information about you with creditors or enemies? There is no denying that the IRS has unequivocally and successfully weaponized its own agency.

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