Addressing a joint session of Congress, President Biden pledged to “crack down on millionaires and billionaires who cheat on their taxes.” That signaled a long-overdue $80 billion boost in funding for just about the only federal enforcement agency that has seen its funding slashed in recent years.
Former Treasury Secretary Larry Summers said “investing less than $100 billion in the IRS over a decade will generate $1.2 trillion to $1.4 trillion in additional tax revenue, primarily from high-income individuals, who are disproportionately responsible for underpayment of owed tax liabilities.”
More revenues from high-income taxpayers means more resources for all of us. Biden’s expanded child tax credit, for example, will transform the lives of American children living in poverty. And whenever politicians fret about the cost of making the expanded child tax credit permanent, they ignore the profound long-term costs of an impoverished childhood.
That’s because privilege allows those at the top to ignore the collective costs of growing up poor. Privilege also frees those with resources from shouldering the burden of lifting children out of poverty by paying less tax than they owe with impunity. From this perspective, turning a blind eye to wealthy tax cheats seems impossibly cruel.
Yet if the nation learned anything from George Floyd’s murder and our wide reckoning with discrimination in policing, it should be that handing vast new resources and powers to law enforcement may have unintended consequences.
Those others urging Biden to give more weapons to the IRS fail to understand how privilege shields wealthy taxpayers from scrutiny. Against all evidence, they insist that with the next $80 billion it receives in funding, the IRS will magically shift its focus from the poor Black taxpayers it spent the last $80 billion auditing. Racially disparate tax enforcement helped make the Black Lives Matter movement a reality that few can ignore, yet within tax law, its lessons routinely go unheeded.
In tax just as everywhere else, enforcement resources inevitably fall more heavily on those with the least, who are easier to pursue. Today, that leaves high-income tax cheats free from pursuit by tax authorities while poor Black counties bear the brunt of IRS enforcement efforts. Militarizing the IRS without scrutinizing its history of racially disparate enforcement would throw good money after bad.
Historically, race has played a powerful role in shaping tax policy. In the wake of the summer of 2020, the IRS has finally begun to grapple with the legacy of its “color blind” approach to taxation. From the top down, the men and women of the IRS serve with integrity, yet striking examples of racially disparate enforcement can still be found. Until we understand more about why such stark disparities between the treatment of poor Black taxpayers and their wealthy white counterparts persist, handing over another $80 billion and expecting different results would be foolish. Doing so in the name of protecting the most vulnerable among us would be — say it with me — ironic.
Dean is a professor at Brooklyn Law School and creator and host of the Tax Maven Podcast. He is the coauthor of “Social Enterprise Law: Trust, Public Benefit and Capital Markets.”
