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We Can’t Believe a Word They Say

The failure of the media to report truthfully has become the norm. We expect it. The reporting on the bill to aid Israel, which just passed the House, was no exception.

The House of Representatives, under the leadership of newly elected Speaker Mike Johnson, passed the Israel Security Supplemental Appropriations Act.  Twelve Democrats voted with all but two Republicans to pass the bill. It provides $14.3 billion in aid to Israel as a stand-alone item, which is offset by rescinding $14.3 billion of the $80 billion allocated to the IRS in the “Inflation Reduction Act” from last year.

 

Speaker Johnson promised, when elected, the practice of increasing spending without finding corresponding reductions would end and he got started right away.  Washington went wild and the press sprang into action to do their part. They focused their reporting primarily on the Congressional Budget Office (CBO) analysis of the legislation.

 

The Congressional Budget Office (CBO) “scores” legislation to quantify the financial impact of laws that are passed. They concluded the aid to Israel would result in a $26.8 billion decline in tax collections, a “net cost” of $12.5 billion (after subtracting the $14.3 billion withheld from the IRS).

 

The media used this information to hammer House Republicans on political programs and in print about the stupidity of requiring an offset that would increase costs. They showed no intellectual curiosity about how this could be true. The CBO analysis was all they needed to do their part in making sure this Act doesn’t become law. The Milwaukee Journal Sentinel reported: “The package, with its plan to pay for the aid with cuts to the IRS, would actually end up costing the government billions in lost revenue from tax dodgers, according to budget scorekeepers.” No deeper explanation was provided to its readers.

 

Serious journalists interested in truth would find much more to investigate and report. The IRS estimates that it loses nearly $500 billion dollars every year due to noncompliance.  It refers to this as the “tax gap” – the difference between taxes owed and taxes paid. As part of the massive misnamed “Inflation Reduction Act” from last year, the IRS was allocated $80 billion over 10 years.  It was projected this would produce $180 billion in added tax collections over ten years and thus a “net savings” of $100 billion more than the $80 billion spent. The IRS plans to hire 20,000 employees over two years and the projections are based on modeling assumptions that show for every dollar spent on tax enforcement six dollars of revenue will be collected. 

 

The IRS has a 150 page “Inflation Reduction Act Strategic Operating Plan 2023 – 2031” developed by the bureaucrats who run the organization. It details how $100 billion in net new revenue will materialize (2% of what it says it loses each year) and how the IRS will be transformed into a user-friendly organization that will be a delight to experience for the American taxpayer. It makes no mention of simplifying the 2,652-page tax code and the additional 9,000 pages of regulations that make paying US taxes so complicated an entire industry for tax lawyers and accountants has been created. My cursory read of the plan found it filled with pipe dreams and unlikely to produce much more than an IRS bloated to 25% larger than its current size.

 

The CBO does not address the likelihood the IRS will actually be able to execute its plan. That would be an excellent job for a serious media. Government bureaucracies are deeply entrenched with a life of their own. We have seen those who try to mess with the status quo pay a high price.  The changes that are needed will require disruptive, resilient leadership and the viciousness of the early attacks on Mike Johnson suggests career politicians, government bureaucrats and the media fear he may be such a leader.  We cannot expect to hear the truth about him personally or about his approach to governing.

 

We are forced to seek out all-too-rare trustworthy sources of information while we await a much-needed resurgence of journalistic integrity.  In the meantime, we can’t believe a word they say.

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