President Biden and the Democrats are setting up the IRS as the next three-letter intelligence agency, with the rapid expansion of the service’s power and payroll. Changes resulting from the improperly-named Inflation Reduction Act have positioned the Internal Revenue Service as a potent political weapon — one that Democrats may not be the only ones to wield.
The Patriot Act and post-9/11 surveillance state showed just how swiftly and uncontrollably seemingly good intentions can balloon into a statist’s dream. Combine the expansion of National Security Agency-style collection of data with a supercharged, super-staffed IRS and you get the worst of both worlds. The role of the reformed IRS will be not to squeeze CEOs and eight-figure corporate functionaries, but to get every dime from ordinary people via excessive auditing.
Bureaucrats at the agency realize that the wealthy and large companies have tax attorneys on retainer or could easily hire one; this is precisely why the IRS audits the poor at five times the rate of the rest of the population. The resulting increased revenue from the working and middle classes is enough for the Congressional Budget Office to assess the IRS’s audit provisions as a $20 billion tax hike on the middle and working classes. The expansion of the IRS’s bureaucratic state will result in the largest tax increase on ordinary people in decades.
While a beefed-up IRS will disproportionately burden working- and middle-class individuals, this represents just the tip of the iceberg. The massive expansion of the agency will also give it the ability to potentially target political “enemies.” During the Obama years, the IRS’s targeting of conservative groups by denying nonprofit status was effectively swept under the rug by the legacy media. Such targeting could become routine. If Biden truly believes that Republicans are “semi-fascists,” the IRS could transform into a renewal of the House Un-American Activities Committee. The Biden administration could not show proper restraint against an opponent it sees as semi-treasonous.
There will be little to keep the expanded IRS from overreaching its authority. Considering recent abuses of the agency by the Democrats, what is the fine line between what is labeled an “extremist group” versus a parents’ organization challenging the local school board? Strengthening the potential for abuse — including audits, garnishing of wages, and potential jail time — is catnip to big-government leftists. A member of your local hunting club had a brother who participated in January 6 protests? An audit isn’t a big deal, they’ll say, as long as you’re not hiding anything. It’s for the public good, you see.
The likely ramifications of ballooning the size and scope of the IRS don’t stop at just increased audits or even political targeting. Consider the $600 transaction threshold that financial institutions are now required to report to the IRS. Increased enforcement and more stringent control over our bank accounts also could be used to justify a digital dollar. Americans’ transactions could become public on the government blockchain. Any number of national security and pseudo-patriotic reasons could be drummed up to force individuals to forfeit financial privacy. You don’t want Uncle Sam knowing what you bought? Is it because you’re funding alt-right groups, foreign terrorists, or laundering hundreds of dollars from your Etsy account?
The definition of extremism can vary depending on political needs. Donations to vaguely conservative causes, such as with GoFundMe and the Canadian truck rally earlier this year, could be severely punished and even result in loss of access to banking. Every tiny transaction, preserved in amber on the blockchain, could be used months or years later to justify running you out of your job or could be blasted all over the media. One thinly-veiled policy letter from the IRS could lead to crackdowns by private banks and transaction services such as PayPal on right-wing causes.
If you think that “canceling” is a problem now, wait until access to one’s own funds can be restricted or blocked entirely based on old tweets. And as a digital currency takes hold, paper cash will likely be phased out in its entirety, making the population fully dependent on a traceable monetary system that is easily controlled by both central powers and private corporations willing to do the government’s bidding.
Ultimately, as the IRS becomes increasingly powerful and weaponized, many Americans will realize that it is simply easier to comply with the agency’s directives (even when unjust) than to go through a lengthy and costly appeals process.
Both parties likely will take advantage of this ballooning government power. Democrats are creating a federal apparatus that Republicans could utilize in the destructive manner once they seize control. Just as Democrats did not dismantle the Bush-era growth of government, the GOP will use the new IRS to their own advantage before they successfully dismantle it.
As our country faces severe issues with trust of institutions, Joe Biden and his allies are creating the eventual end to financial privacy and establishing one of the most frightening applications of federal power of the next generation.
Kristin Tate is a libertarian writer and an analyst for Young Americans for Liberty. She is an author whose latest book is “How Do I Tax Thee? A Field Guide to the Great American Rip-Off.” Follow her on Twitter @KristinBTate.