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Treasury Secretary Timothy Geithner testified before the Senate Finance Committee last Wednesday. Susan Walsh/AP Photo
Representative Todd Akin, a Republican from Missouri, read about it in the paper. So when Treasury Secretary Tim Geithner was sitting before him at a hearing of the House Budget Committee on Wednesday, he thought he would bring it up.
“It appears from a WSJ article that we’re going to increase the IRS budget by 9.4% and hiring 5,000 or 5,100 agents at the cost of 460 billion dollars,” said Akin.
Its actually 460 million dollars. That puts the total boost to the IRS budget at 1.1 billion dollars. But whatever the numbers it doesn’t make sense to Akin.
“Not to mention the fact that it would make us look better if we didn’t have a goon squad 5000 more IRS agents tromping around the country with the economy the way it is,” said Akin.
“I hope we’re not being reckless about talking about the people who work for as being part of a goon squad,” said Earl .
Blumenauer is a Democratic Representative from Oregon. Where his colleague sees excess, he sees a need.
“I’ve met with accountants and attorneys in my community who wonder why in the heck we’re not auditing anymore,” said Blumenauer.
Treasury Secretary Geithner told the House Committee why such a budget increase makes sense in hard times.
“All the people that look carefully into how the IRS works say that if you put a dollar carefully into enforcement, customer service things like that, you get more than four dollars back,” said Geithner. “Why is that fair? It’s because by helping people meet their obligations you make sure that other people are baring too heavily the cost of being citizens of the country.”
In Obama’s budget plan, the 5,100, new IRS employees would mostly work in customer service and technical jobs. It should make it easier for Americans to file tax returns.
Eric Toder, co-director of think thank, the Tax Policy Center, agrees that we should beef up enforcement.
“Audit rates are not high in historical terms and there’s huge amount of non-compliance particularly among small businesses,” said Toder. “Most wage earners because of withholding pay virtually all the taxes they owe.”
But coming down on small business could stifle growth. That’s according to Jeff Stier, a Senior Fellow at the National Center for Public Policy Research.
“Its really business that brings us out of recession,” said Stier. ”The best thing government can do is get out of the way and allow business to operate. Rather than hiring more agents breathing down everyone’s neck, perhaps they ought to consider simplifying the tax code.”
Eric Toder, of the Tax Policy Center, says that for now, we need to work with what we have.
“The question of what tax laws should be is really a separate question,” said Toder. “The tax laws now are what they are. If there were a simpler tax code maybe we could have a smaller IRS. But we don’t have that.”
In their budget, Republicans would actually cut the IRS by 1 percent.
