Every $1 in cuts to the IRS would increase deficit by $2
House Republicans have released a proposal to grant Israel billions of dollars in military aid and to pay for it by cutting funding to the Internal Revenue Service, but experts say that the move would increase the federal budget deficit by more than the cost of the aid itself.
Marc Goldwein, senior policy director at the nonpartisan fiscal watchdog group Committee for a Responsible Federal Budget, said that the plan would add roughly $30 billion to federal deficit because the cuts to the IRS would impair its ability collect taxes.He clarified that this formula is not static or linear, and that as the IRS is provided with more funding to enforce tax collection, the marginal return on those dollars declines.
The Inflation Reduction Act of 2022 provided $80 billion in new funding over ten years, which the Congressional Budget Office estimated would increase revenues by roughly $200 billion over that same time. No Republicans in Congress voted for the measure. The Republican proposal has little chance of passing the Democratic Senate and will also be opposed by the Biden White House, and even many congressional Republicans would like to see Israel aid passed without any offsets.
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