Catherine Rampell writes about the latest Republican effort to punish the poor:
Never accuse Republicans of being uncreative. Once again, they’ve found an innovative way to punish the poor and simultaneously increase budget deficits — all with one nifty trick!
To pull off this impressive twofer, they would put every American applying for the earned-income tax credit (EITC) through a sort of mini-audit before getting their refund. This would both place huge new burdens on the working poor and divert scarce Internal Revenue Service resources away from other audit targets, such as big corporations, that offer a much higher return on investment…. The language is vague but appears to refer to a Heritage Foundation proposal that would require the IRS to “fully verify income through a review of Form W-2, Form 1099, business licensing or registration, and relevant invoices” before dispensing any refunds. So, a mini-audit.
Rampell is right about almost everything. But she gives Republicans too much credit for being creative. They’ve been going after the EITC ever since the Gingrich Revolution of 1994. Here is David Cay Johnston in Perfectly Legal:
The most vociferous critics of the credit were those in the forefront of the campaign to cut taxes on the rich, notably House Speaker Newt Gingrich…. President Clinton, fearing that the new Republican majority had the votes to savage the program, proposed a diversion. How would Congress feel, Clinton asked, about giving the IRS more than $100 million a year just to audit applicants for the credit to make sure that only the deserving working poor benefited? Congress went for the deal.
In 1999, for the first time, the poor were more likely to have their tax returns audited. The overall rate for people making less than $25,000 was 1.36 percent, compared with 1.15 percent of returns filed by those making $100,000 or more.
Republicans have been obsessed for decades with fraud among the working poor who receive the EITC. At the same time, they’ve also been obsessed with reducing funding for audits of rich people:
During the Trump era, I’m sure we can count on audits of the rich continuing to go down, while audits of the poor get a new lease on life. He’s a populist, you see.