America's Talking - Episode 5: "Politicization" of IRS becoming concern for Republicans

Episode Date: July 9, 2021

President Joe Biden has pushed for beefing up IRS audits of corporations to raise revenue for his new spending proposals, but Republicans are raising the alarm about the potential consequences of the plan. Biden unveiled his "Made in America Tax Plan” earlier this year as a strategy to help fund his trillions of dollars in proposed new federal spending that includes several tax hikes. Despite this, a bipartisan coalition in the U.S. House and Senate have agreed to a basic framework for Biden’s proposed infrastructure plan, but one element has been the theme of the negotiations among Republicans: no new taxes. The GOP pushback against raising taxes, though, puts more pressure on the Biden administration to find ways to fund his agenda. Aside from Biden’s controversial tax hike proposals, the president also has proposed adding $80 billion in funding to the IRS so it can increase audits of corporations. READ MORE Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to America in Focus, powered by thecentersquare.com. I'm John Spataro, and this is the 27th week of 2021. Coming up, we'll take a quick look at one of the top stories from the center square.com. And later, executive editor of the center square, Dan McAulb and DC reporter Casey Harper, will take a deeper dive into the top stories of the week, including President Biden's recent stops through the Midwest, a growing concern over the politicization of the Internal Revenue Service and child tax credit checks are set to hit Americans' bank accounts next week. Coming up right after this on America in Focus, powered by thecentersquare.com. Hi, this is Chris Krug, publisher of the Center Square.

Our team produces the nationally read and recognized news stories at thecentersquare.com, the country's fastest growing, non-profit, nonpartisan, state-focused news and information site. We deliver essential information with a taxpayer sensibility through reporting that's easy to understand and easy to share with your friends and family. We know that you need information that allows you to understand what the governor and your local legislators are doing. Get the news that you need to know at thecentersquare.com. That's thecenter square.com.

Thecenter square.com. Welcome back. Here are the top stories of the past week on the center square.com. President Joe Biden has a new target for COVID-19 vaccinations after failing to accomplish his original goal. The president previously said he wanted 70% of American adults to receive at least one dose of the vaccine by July 4th, but only about 68% of adults had received at least one dose by Independence Day. Now the president is pushing a new targeted approach that includes five key objectives, such as boosting vaccine outreach at pharmacies and family doctor offices, as well as more mobile

vaccination clinics and major events and gathering places. There are currently 158 million Americans fully vaccinated or 48.2% of the population, with nearly 56% of the population having received at least one dose. According to the CDC, Vermont, Massachusetts, and Maine are leading the nation and percentage of population fully vaccinated, with over-stretched. 62% of their populations, Arkansas, Mississippi, and Alabama are the least vaccinated states, with less than 35% of their populations fully vaccinated. To read more about this story and many others, visit thecentersquare.com. Now for a closer look, over to Dan McAulb and Casey Harper. Thank you, John, and welcome to America in Focus, powered by the center square and the center

Square.com. I'm Dan McAulb, executive editor of the Center Square Newswire Service. We are recording this on Friday, July 9th. Joining me today from the nation's capital to analyze this week's news is Casey Harper, the Center Square's Washington, D.C. Bureau Chief. Hey, Casey, the neighborhood fireworks display in my area started to settle down this finally. How about yours? Oh, well, you're luckier than me then. That's how I know I'm getting older. You know, There was a time when I was one out there running around with fireworks, and now I'm the one complaining that these are supposed to stop at 11 p.m. 11. Oh, you're not near as old as I am that.

I was at 9 o'clock earlier this week complaining to my wife. When is it going to stop? Anyway, it has last night we got a respite, so hopefully at least for us, we're waning down there. So usually we begin the segment, Casey, by talking about the big headlines in your neck of the woods. But surprisingly a little bit, this week the news came to me. I live in the far northwest suburbs of Chicago, a town called a sleepy little town called Crystal Lake except when the fireworks are keeping us awake. We're about 45 miles from downtown Chicago. We learned last weekend, the Independence Day weekend, that President Joe Biden was going to visit our tiny community.

this week, and sure enough, he did. He came out with, of course, his entourage, on Air Force One, visited Crystal Lake to pitch his various spending plans, the American Rescue Plan, the American Family Fan, build back better, although it's hard to keep track of them all. There seems to be so many of them. But he stopped by McKinery County College, which is a community college in Crystal Lake. And one of the things he highlighted was his plan to expand, quote, unquote, free schooling for America's children. In this case, it would be community college students. He wants to expand government-paid schooling to two years of community college. Of course, it would be tuition-free if he gets his way.

But somebody's going to have to pay for, of course, because educators aren't going to – work for free. Administrators aren't going to work for free and so on. And it was an exciting, it was an exciting time for our community. In fact, it was the first time, according to the local historical society, that a sitting president visited us out here. But of course, there, along with the president, comes all the hoopla that goes with it. There were the protests and everything else. Did you get a stimulus check, another one? I did not get another stimulus check. See, these modern presidents are kind of like the Roman emperors, and they ride into town, they can throw the gold coins into the crowd.

So I'm just picturing you there as Biden is tossing stimulus checks. I don't want to know if you grabbed one. I unfortunately didn't even make it out to the event, which might be a little embarrassing, the sitting president is like five miles from my house, and I did not go. I did pay attention, though. it was a political event. Let's let's face it. He was here saying the same things he's been saying for months now.

Also over, you know, the independent stay, the longer Independence Day holiday. He was in Wisconsin doing the same thing. He was in Michigan doing the same thing. Pitching his plans as to why spending this money would be good for American families. I do want to focus on just the one part of his plan. He was at the community college, McKinnon County College, as I said. He wants to make the first two years or two years of community college tuition free, but paying for it with a series of tax increases, of course,

this still has to get through Congress and all that kind of thing. And my takeaway from it was, I have two college-age kids, okay? One's going to be a junior in college. One is just going to be entering her freshman year of college. And yeah, as an American, as a parent of college age kids, paying for college can be intimidating, right? It's gotten expensive over there years. There's no doubt about it. As a parent, I have two college-age kids now.

I have a son who's going to be a junior in college, and I have a daughter who just graduated from high school, and she's going to be a freshman in college. And, boy, as a parent, it can be intimidating sending your kids to college. It's gotten so expensive. I want my kids to graduate from college debt-free. I know that's probably not going to happen. But more importantly, I also want my kids to graduate from college knowing they have a bright future, knowing the American economy is strong, knowing that they might have good options when it comes to job choices after they get out. But the ramifications of these spending and taxing plans, Casey, there are ramifications to these.

right? Why don't you tell me a little about that? Yeah, well, you're hitting on something that Biden has been dealing with ever since he took office, which is, you know, a lot of your ideas sound good, but how are you going to pay for them? And if you're paying for them with tax increases, what are the downsides of that, right? And I think it's kind of a very American thing to have a level of suspicion when the government promises you, quote, unquote, free things because, you know, you know, know, it's just kind of the American way to question that, and we don't like taxes. Our country has founded on not wanting to pay taxes. So, you know, the different stories we're talking about

this week even are about how is Biden going to pay for infrastructure. Is the IRS, you know, enforcement? Has that gone too far? Basically, what are the impacts of Biden's corporate tax proposals? All of these questions that Biden is getting is, how is he going to pay for his plans? And are his tax increases going to do more harm than the good of the program? they fund. Right. And that's generally the concern. Many have said, you know, President Biden says he only wants to tax the wealthy. He wants to tax the Americans who are making so much money. The corporations who are profitable and bringing, you know, in billions in some cases of dollars. But the ramifications of that are that when their taxes, just like when your taxes increase, when my taxes increase,

We have to look at our individual budgets and cut back in certain areas. Corporations do the same thing. I'm sorry, go ahead. I think so. Well, I think so. I think we often, I've been thinking about this. We often talk about this at such an ethereal level, but to just put it really practically if, you know, Biden said that he was going to pay for something by taxing all ice cream

store owners. Okay. So what does that mean? Yeah, well, exactly. He might be the last thing he taxed maybe, but he probably gets free ice cream at the White House. If he's going to tax ice cream shop owners, what does that mean very practically for the person who just lives in regular everyday America? It means your ice cream is going to be more expensive because the guy who owns ice cream shop can't just take a hit from the government. He has to raise the prices of his ice cream.

So every time you go, you're going to pay more. And then also if the taxes are, it may be so much that he has to cut back on the hour. So your, you know, your daughter who works part-time at the ice cream shop doesn't. get to work there anymore. And so that's like a very small example with part-time workers. But if you apply that across all industries, all companies, you can see how it would affect on a very broad scale. And that's what we talk about when we talk about taxing the wealthy and taxing businesses. It's not so much that we're just trying to defend the wealthy. I don't really think that's our hard. You know, we're not really trying to defend anyone. We're just trying to explain that

to say that you're only taxing the wealthy is kind of a misleading statement because the wealthy control the prices of things and the wealthier who decides if people are hired or not, if they can afford to hire more workers next quarter when your son graduates and wants to, he is looking for a job. So that's kind of the real life consequences of these things. Well, let me just say this, Casey. If we can, if we can narrow macro economics down to ice cream shops in the future, that would make my life much easier. I'd be able to understand complicated subjects a lot easier. Use your stimulus check to buy ice cream.

There we go. I do want to make one other point about this trip before we move on to President Biden's other spending proposals. He visited the northwest suburbs of Chicago, as I said. He did not spend a lot of time. He did not talk at all about Chicago's biggest issue right now, which is gang and gun violence. just hours before he arrived in our area. Two ATF, two federal agents with the Bureau of Alcohol, Tobacco, and Firearms,

were patrolling Southwest Chicago neighborhoods with a Chicago police officer, and they were shot in their car on an Independence Day weekend when more than 100, there were more than 100 shooting victims, More than 20 people were killed by gunfire in the city. He neglected to bring up Chicago's gun violence problem, and he faced a lot of criticism in our area from that. He, of course, was it about four or six weeks ago? He came out with a plan. He made a speech about addressing gun violence in the nation's cities.

But he really didn't talk about accountability much. He talked about taking guns off of the streets. Many worried about that he meant taking guns away from law-abiding citizens, but he didn't talk about holding criminals accountable. And at least in my area, he was criticized heavily for neglecting that. So I'm sure he'll talk more about addressing gun violence in the nation cities. He essentially fell down. He failed to do that in this instance. And so we'll see how he addresses that in the future.

But why don't we move on, Casey? We've been talking about President Biden's spending plans. There was a bit of a breakthrough maybe this week on his infrastructure plan. What happened this week? Yeah, if you listen regularly, this could be kind of a theme. There may be a breakthrough for Biden on infrastructure or there may be a setback. It seems week to week. He's making progress or he's getting pushback or he's –

You know, two steps forward, two steps back maybe. But the progress we're talking about here is there's a group of bipartisan members in the House, you know, Democrats and Republicans in the House, that released an endorsement this week of Biden's infrastructure bill. Now, for those who haven't been following it, the very short history is that Biden unveiled a roughly $2 trillion mega infrastructure plan that has been in negotiations, is one of something much smaller that didn't increase taxes. Biden wanted to increase taxes to pay for his plan. They've been back and forth for for weeks and weeks, and those negotiations fell apart. And then a

different group of bipartisan members in the Senate, not the House, in the Senate, they have been hammering out a compromise with the Biden administration. And they recently unveiled that compromise. Now, the group that we wrote about this week is a bipartisan group in the House. And the House. They had released a separate different plan, but they've essentially dropped their plan to support and endorse the Senate compromise. Now, the Senate compromise has not passed the Senate or the House. The legislation is still being written. It's really unclear. And we'll have to see the legislation comes out. It's really unclear if Biden can get that support. But the big news here is that one of the competing bills in the House does have bipartisan support. So it's really unclear if Biden's going to

have enough support to get this through. I'd say it's 50-50. But what he can say now is he does have bipartisan support in the House and the Senate. And so you mentioned the initial, President Biden's initial plan would cost about two trillion dollars if it had passed. It's not going to pass. This new plan is about $1.2 trillion. Is that correct? So a scale down, not quite half of what the, a little bit above half of what the other one was. And when we talk about infrastructure, well, one of the criticisms of his initial two trillion dollar plan was when you talk about infrastructure, you're talking about roads and bridges and things like that, but his initial two trillion dollar plan went well beyond our definition, most people's definition of infrastructure to include other

things. The scale down plan is mostly infrastructure or doesn't include some other components, broadband, things like that. The new plan is mostly scaled down. Some things like broadband are kind of iffy. Some people would consider that, you know, real infrastructure. The things that were really included in the bill that we're causing Biden, a lot of controversy is things that would be more like social infrastructure, like some health care kind of things. And a lot of the progressives and the Democratic Party are really pushing for that. There's something to watch is that Senator Bernie Sanders actually has a lot of sway in this bill because of his committee position. So you have to have a Bernie Sanders influential.

bill that is also going to get bipartisan support and stamp off. So you can you can understand Joe Biden's difficulty. But a lot of the progressive members want to say, hey, we're passing a major spending bill here. Why aren't we throwing in some of the progressive priorities? If you take it from a Democrat standpoint, we have the House, the Senate, and the White House. That's what they're saying. So why are we playing it so safe? Now, that's kind of the Democrat position. We have all three branch to government, we may not have those in the next cycle. So why are we doing so much to appease Republicans? You know, we need to just nuke the filibuster and ram this through with our spinning proposals. And that's what some progressives are saying. So far, it seems like Biden doesn't

want to do that. But there's always a chance he get fed up and tired of negotiating with Republicans and just go his own way. So as always in Washington, nothing's easy. These kinds of negotiations are ongoing. So we'll be following them closely at thecentersquare.com. I wouldn't expect any resolutions in the coming week or two, but at least there was some progress to talk about this week. So why don't we turn our attention to sort of a couple of developments this week regarding the Internal Revenue Service, the IRS, the federal agency that collects our taxes. Well, there was some controversy a couple of weeks ago about an IRS decision regarding a Christian group that it would not grant nonprofit status to there. Well, there was an update on that this week.

What happened? That's right. You know, I'm assuming that every podcast listener religiously reads every one of my stories. So, but in case, you know, you were in the hospital or something you couldn't read one of my stories. That's a joke. Basically, the, this Texas nonprofit called Christians engaged. is a Christian group that helps, you know, Americans become or helps Christians become more engaged in the political system and that, you know, explains the name. But they applied for federal tax exempt status.

And the IRS actually rejected them and said that because they are based on biblical values and biblical values are, you know, quote unquote, Republican and therefore they're a political group. Now, if you follow this stuff at all, that's like a very controversial. ruling. There's plenty, I mean, there's countless Christian nonprofits and Christian nonprofits that are engaged in the political system. So, you know, regardless of your feelings on this, if the IRS were to take that position, it would be a huge break from the position the IRS has always held for all of American history. I mean, it would be a game-changing decision. And so, you know, Republicans in the House and Senate sent a letter saying, this is outrageous, the person, You know, this needs to be overturned, and the person involved needs to be fired.

And the IRS announced this week that they overturned the decision. Now, there's been no word that I've seen of anyone being fired, but it's pretty hard to fire a government employee. Dan, I don't know if you know that, but a federal employee. But I've heard that. Yeah, I'm not saying he should be fired. But they did overturn the decision. And so that was, I mean, it's not just an I said the case that it does. I think we're going to talk a little bit about IRS enforcement.

and it does play into that conversation. But for now, for those of you even following that story, it looks like it's been resolved for now. Right, and we're going to get into that other story here in just a second. And the bigger concern, too, was what this earlier decision, before they overturned it this week, what the ramifications could be for other religious organizations. And I guess let's segue into that next story regarding the IRS. Among President Biden's many plans, many spending plans, to pay for them was to give more resources to the IRS to audit corporations. Well, in part,

not just because of, but in part because of this recent decision regarding this religious organization, there are a lot of people who do not want to give the IRS more power. So tell us about that angle. Yeah, one way that Biden has proposed paying for his plans is, you know, spending an extra $80 billion on the IRS. Now, if you may remember when Ted Cruz, just a few years ago, wanted to abolish the IRS. And actually sort of, you know, Rick Perry, though, I don't think he could remember that on the stage if you remember that at the moment. But so Biden has basically said, if we spend $80 billion more on the IRS,

they will be able to raise $700 billion in revenue because we're basically going to pay these people to audit, to do way more audits. And all these audits are going to generate more revenue. Now, these numbers, I mean, they really are estimates. I mean, you know, the Biden administration, that's such a, I mean, it's really a pretty, it's a guess. It's a guess. Yeah, it's a guess. $700 billion maybe we'll see, you know, well, maybe we won't see. But this has kind of not been talked about very much. But now that Biden is looking like he's taking a lot of his tax increases off the table because Republicans can't stomach them, he's got to pay for some of these things somehow.

And so this could be, you know, a beefing up IRS enforcement could be a way to raise revenue for his plans without, you know, with Republicans still saying we didn't raise taxes. We just enforced existing taxes. Now, the problem is, though, this Christians engaged case, which we were really, I would say we were ahead of a lot of other publications on this story, has become a major thing because House Ways and Means has been pointing to this case as just another example in their mind of how the IRS targets conservatives disproportionately. And, you know, you may remember the Tea Party Lois Learner scandal where the IRS was caught targeting conservative groups.

And so this kind of is bringing back all those memories. And so it's very much. And then, of course, was under former president Barack Obama, who's vice president. of course, was current President Joe Biden. So understandably, there's going to be some concerns about that, about the IRS being a political arm of the administration, attacking corporations. Of course, in this theory that this guess, as we've said, that President Biden says, if you throw more resources at the IRS,

they'll bring in $700 billion in more revenue through audits. that's essentially an assumption that there's a bunch of corporate tax cheats out there. And I'm not saying there aren't any corporate tax sheets out there. There probably are some, but $700 billion. I mean, that's assuming that a lot of corporations are a lot of doing whatever they can to get out of paying legal taxes that they should be taking. So, Dan, let me tell you, if you double my salary, I can guarantee $700,000 in extra revenue for the company. Okay, just give me more money, and I promise that, you know, there will be some money. We'll show up later on down the road.

Don't worry about it. I'm going to have to run that by our publisher, Casey. So I'll get back to you on that. Try not to lose any sleepover. Our Mitch McConnell. Got it. All right. Well, Casey, we're almost at a time.

But just want to ask you, what's going on next week? What can we look forward to talking about next week? we have a really interesting story. I mean, of course, keep tabs on infrastructure. There's other things going on. But in line with what we've been talking about, starting next week will be the child tax credit payments. And so we've been writing about this a lot. But for those who are catching up, basically in the recently past $1.9 trillion COVID stimulus bill,

they expanded the child tax credit. And then they also made it where you can receive it in advance. on a monthly basis. So instead of waiting to you file your taxes next year, if you qualify, and roughly 90% of families do, you'll be getting paid per child a check from the IRS starting next week. And it's going to be monthly. So if you have, you know, two or three kids, you could be getting 500, you know, 800, you know, it'll depend on your income and the age of the children.

But, you know, if you have four kids, you can be getting over, you know, $1,000 starting a starting next week. And so I just want to alert our listeners to that. You don't have to take any action or anything. It's just going to come to you if you qualify. Right. And my understanding is if you file your taxes electronically and you get a tax return every year and it's direct deposited in your account, I mean, this child tax credit is going to be direct deposit into your account. So you could wake up Thursday or Friday next week and have some extra money in your account. That's right. Exactly like I'll have extra money. money my account from you giving me the extra funds.

That's right. Pending approval. Right. But the other side of that, though, too, is, and we talked about this on the podcast before, though, too, while the tax credit has increased, a lot of Americans generally in the past have received this credit on their federal income tax return when they get their return after they file. usually April 15th of every year. Of course, during the pandemic, that's been extended for the last couple of years. So that is money that they won't see next year when they file their returns, correct? They'll get it now instead of later.

Yes. And I mean, the total amount of money is larger, but you can defer it. Also, it is worth noting you can go on the IRS website and defer this money. But if you don't actively defer it, you'll get it now instead of later. Thank you for your insight, Casey, as always. This has been America in Focus, the podcast, powered by the Center Square. We are out of time. We'll talk to you next week.