Editore"s Note
Tilting at Windmills

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September 22, 2005
By: Kevin Drum

THE REPUBLICAN WAR ON THE POOR....As it turns out, the Republican Study Committee's list of proposed spending cuts is aside from some humorous arithmetic errors mostly just a standard conservative wish list, and not a very serious one at that. What's more, as Joel Achenbach points out, a huge part of it is nothing more than the usual attacks on the poor, including a total (by my count) of $477 billion in Medicare/Medicaid cuts.

Achenbach also points out another conservative hobbyhorse that I noticed as well: "Verify Income of Earned Income Tax Credit Participants." Talk about a blast from the past! The EITC is a way of boosting the incomes of the working poor, one that actually works pretty well, so naturally it's been a conservative target for years. In the mid 90s, just after Newt Gingrich came to power and shortly before the famous IRS show trials orchestrated by Senator William Roth (short version: IRS agents = jackbooted thugs), Bill Clinton caved in to pressure from Republicans who were supposedly concerned about EITC "abuse" and approved a $100 million program to audit EITC recipients.

The result was predictable. As David Cay Johnston pointed out in Perfectly Legal, "In 1999, for the first time, the poor were more likely than the rich to have their tax returns audited. The overall rate for people making less than $25,000 was 1.35 percent, compared with 1.15 percent of returns filed by those making $100,000 or more."

There's nothing wrong with stopping genuine tax fraud, of course, but if you're going to do it, you should do it across the board and needless to say, if you're serious about stopping income tax abuse, it's the rich you should go after, not the working poor. After all, they're the ones with all the money. As Max Sawicky explains in this EPI briefing paper, EITC abuse costs at most $9 billion per year, compared to a tax gap of at least $250 billion from other sources. For some reason, though, the Republican Study Committee doesn't seem to think that increasing the IRS budget to go after that other $250 billion is worth thinking about.

Funny, isn't it? You'd almost think it was some kind of class warfare if it weren't for the fact that Republicans never engage in class warfare. Maybe somebody should ask them what their real reason is.

Kevin Drum 4:31 PM Permalink | Trackbacks

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