How DOGE’s Cuts to the IRS Threaten to Cost More Than DOGE Will Ever Save
www.propublica.org
The Trump administration claims gutting federal agencies will save money, but cutting the IRS means the government collects less taxes. “If you’re interested in the deficit and curbing it, why would you cut back on the revenue side?” one expert asks.

Summary

Under the Trump administration’s “efficiency initiative,” spearheaded by Musk’s DOGE, over 6,000 IRS employees, many specializing in auditing wealthy individuals and corporations, were fired.

This action reverses efforts to address prior underfunding and staffing shortages within the IRS.

With studies showing the IRS generates $5-$12 for every dollar spent on audits, especially on wealthy taxpayers, experts like fired engineer Nershi argue that these cuts will reduce revenue, not save money.

Former IRS Commissioner Koskinen questioned, “why would you cut back on the revenue side?”. Critics argue these cuts, framed as fiscal responsibility, will actually cost more through lost revenue and ultimately benefit “tax cheats.”

  • Lemminary@lemmy.world
    2·
    3 days ago

    Isn’t the value of the dollar tied to how much money is circulating? It makes no sense to talk about infinite money if all that does is dilute what’s around.

    • aberrate_junior_beatnik@midwest.socialEnglish
      1·
      15 hours ago

      This is a very econ 101 take. A similar argument is that if you increase the minimum wage, people will per se lose their jobs because of supply and demand curves. But the empirical evidence doesn’t support that. I don’t think we know for sure why, but increasing the minimum wage has second order effects that seem to counteract this. Similarly, it’s true that if you print money, you increase the supply of money which according to supply and demand means the money will be worth less. Now I don’t think we have as clear empirical evidence that shows this isn’t true, but we do print money all the time. I mean, that’s how government works; congress passes a bill, and the federal reserve supplies (“prints”) the money to fund it. There’s not some bank account somewhere that has to have the money and if it doesn’t we have an overdraft situation. But, if the bill is printing money to support farmers and provides an increase in the food supply, the cost of food relative to the dollar could go down. Now maybe the cost of other things goes up, but the point is that it’s much more complex than “government print money, inflation go up.”

      The argument I’m making here is based on Modern Monetary Theory (maybe I’m doing a bad job of representing it or understanding it), which you should definitely check out if you haven’t.

      • Lemminary@lemmy.world
        2·
        4 hours ago

        This is a very econ 101 take.

        Yes, I’m a pharmacobiologist and not an economist. 😅

        Thanks for elaborating, though!