The Austerity Myth · Investigation · 2024–2026
Cutting the IRS loses money.
Enforcement funding returns more than it costs, so rescinding it doesn't save money — it widens the deficit. The nonpartisan CBO scores it that way, and Congress cut it anyway.
FACT
§2 · Thesis
A 'spending cut' that the official scorekeeper says increases the deficit — sold as fiscal responsibility.
CBO finds IRS enforcement returns more than it costs, so cutting it loses net revenue. The direction is FACT; we cite the scored dollar figures, not a slogan.
The number
$20B → $66Bcut → revenue lost
Reading updated CBO scoring, the Committee for a Responsible Federal Budget estimated that rescinding about $20 billion of IRS funding would lose roughly $66 billion in revenue — a return above three to one. Every dollar 'saved' costs the Treasury more than three.
CRFB, reading CBO
§5 · Graded Claim
Cutting IRS funding increases the deficit — the CBO, not an advocacy group, scores it that way.
FACT
The Congressional Budget Office — the nonpartisan body both parties use to score bills — finds that rescinding mandatory IRS funding reduces revenue by more than the amount saved, so the net effect is a larger deficit. Enforcement spending has a positive return, so removing it forgoes more in uncollected taxes than it saves in appropriations.
§5 · Graded Claim
The bigger the cut, the worse the deal — the IRS drops its lowest-return enforcement first.
FACT
CBO explains that when the IRS loses resources it first curtails the enforcement with the lowest estimated return, so the revenue lost per dollar rescinded is larger for a bigger cut. The more Congress cuts, the more each cut dollar costs in forgone revenue — the opposite of 'cut more, save more.'
The record
How this page is graded.
- The direction — IRS cuts lose net revenue and increase the deficit — is FACT, from the nonpartisan CBO both parties rely on.
- The dollar figures ($20B → ~$66B per CRFB; $35B → ~$89B per BPC citing CBO) are cited as specific scores, not a single 'X-to-1' slogan.
- CBO is the conservative floor: Treasury/IRS marginal estimates run higher (~5-to-1 to 9-to-1 for high-end enforcement) because they credit deterrence CBO scores cautiously. We lead with the lower, harder number.
§7 · Why it matters now
Why it matters.
When enforcement is cut, the taxes owed by high-income filers and large corporations don't disappear — they go uncollected, and the shortfall lands on everyone who already pays. Selling that as fiscal responsibility, while the official scorekeeper says it deepens the deficit, is the austerity myth working as designed: 'we can't afford it' applied to the one kind of spending that pays for itself. Cut the auditors, and the people with the most to hide pay the least.
▸ The Austerity Myth →
▦ Ledger gaps
Help us fill these lines.
- OpenHow much of the 2022 Inflation Reduction Act's ~$80 billion in IRS funding has ultimately been rescinded or redirected, and CBO's scored deficit effect.
- OpenThe measured change in audit rates on high-income taxpayers and large corporations after the cuts.
- OpenThe size of the annual 'tax gap' (taxes owed but unpaid) that enforcement funding is meant to close.
Help fill these →