While the federal government has gotten bigger than ever in the wake of the pandemic, what has Republicans really horrified at the moment is President Biden’s proposal to better fund Internal Revenue Service enforcement to go after tax cheats. The prospect is so awful that conservatives are mounting an advertising campaign in key congressional districts to fight it.
That campaign includes television ads warning that Biden plans to unleash an army of faceless oppressors reminiscent of the agents in “The Matrix” who are “coming for every dime they can grab, at your house and at our small businesses,” as we see stock footage of struggling middle-class people looking in despair over their bills.
Of course, the reality is that ordinary people — the kind who get all or nearly all of their income from their job — can’t really cheat on their taxes. Their employer reports their income directly to the IRS, and since they take the standard deduction rather than itemizing, they can’t come up with creative deductions to lower their stated income.
It’s the wealthy — people with many different sources of income and many opportunities to hide what they make — who do the bulk of the cheating.
And it’s the wealthy who would be most affected if the IRS had the resources to enforce the law. Between 2010 and 2018, when the agency’s enforcement budget fell by 24 percent, the audit rate for large corporations fell by 51 percent, and the audit rate for millionaires fell by 61 percent.
That’s precisely the result Republicans were after when they forced through those budget cuts, and they’ll be damned if they let Democrats enable the IRS to crack down on wealthy tax cheats.
That’s part of the tax story; the other part is maintaining the Trump tax cuts, which Senate Minority Leader Mitch McConnell calls a “red line."
What’s notable here is what’s missing. While anti-tax fervor is as strong as ever in the GOP, the broader goal it was supposed to serve — reducing the size of government — has become almost an afterthought.
While they’ll still say the same things they always have about how government is inherently oppressive, by the evidence of their actions and priorities, if you told today’s Republicans they could have low taxes for the wealthy and corporations but government would keep growing, they’d take the trade.
Indeed, they already have. They had total control of government through 2017 and 2018, and all they did was cut taxes, while spending kept going up. In 2016, the federal budget was $3.9 trillion, in 2017 it was $4 trillion, in 2018 it was $4.1 trillion, and in 2019 it was $4.4 trillion. They could have reduced the size of government, but they chose not to.
Paul Ryan’s vision of privatized and shrunken Medicare, along with an all-out assault on every other facet of the safety net, has been filed away in the box of things Republicans would like to do but consider too much trouble.
It’s hard to overstate how important a shift this is, particularly the uncoupling of the goals of low taxes and small government. Conservatives used to see the latter as the whole point of the former. As Larry Kudlow wrote in 1996, “tax cuts will starve the beast," putting more pressure on lawmakers "to downsize, restructure or eliminate the failed social-engineering bureaucracies left over from the Great Society.”
Or as anti-tax advocate Grover Norquist put it rather more colorfully, “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”
Somewhere along the way conservatives might have realized that tax cuts don’t actually “starve the beast." History has proved (see here or here) that tax cuts do not produce subsequent spending cuts. More likely, they’ve decided it’s just not as important as keeping taxes for themselves and their patrons low. It’s not that they wouldn’t prefer that government be small, but if they get theirs, that’s what really matters.
Which is why, perhaps appropriately, Norquist’s organization applied for and received hundreds of thousands of dollars in covid-19 related loans from the federal government. As did, even more hilariously, the Ayn Rand Institute.
It doesn’t help the small-government cause that Donald Trump, the demigod to whom all Republicans must bow down, never particularly cared about it as an abstract goal. Meanwhile, Democrats have awakened from the spell cast by deficit scolds and no longer worry too much about whether every dime of new spending is “paid for” with tax increases or spending cuts elsewhere.
That means Republicans can’t intimidate the Democrats into accepting spending cuts by bleating about the deficit. They almost seem resigned to the status quo of steadily growing government.
So this is the current Republican formula: Fight for voter suppression, to guarantee future electoral victories even when they lack majority support. Whip up culture war frenzies to give the rubes something to get angry about. Then when they take power, instead of slashing government, just pass more tax cuts. What could be more important?
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