1. While testifying before the Ways and Means Committee on Friday, Treasury Secretary Janet Yellen made a number of remarks that were newsworthy, ranging from how IRS audits will impact the middle class, to her refusal to share details about who will really pay President Biden’s proposed tax hikes. Here are six key moments.
Secretary Yellen committed to make public the IRS’s plan for its $80 billion in new funding to hire 87,000 new agents.
Chairman Jason Smith (R-MO) asked Secretary Yellen at the beginning of the hearing whether she would commit to providing Congress with the IRS’s plan for the $80 billion in new funding provided by Democrats in the so-called “Inflation Reduction” Act. Secretary Yellen promised that the plan would be provided in a matter of “weeks.”
2.Secretary Yellen admitted that the number of taxpayers facing new audits may rise, while the proportion of audits may stay the same relative to “recent years.”
Rep. Adrian Smith (R-NE) asked Secretary Yellen about her directive that is supposed to protect middle-class taxpayers from a rise in audits. Yellen admitted that the number of audits would increase for families – but not the proportion of total audits. Based on Yellen’s answer, Rep. Smith summarized: “So, according to the data, we can expect up to 90 percent of the new audits to be on those making less than $400,000.”
3. Secretary Yellen refused to commit to showing how middle-class families and small businesses would be protected from President Biden’s tax hikes.
Chairman Smith asked Secretary Yellen to share the legislative text of President Biden’s proposed new tax hikes as part of his Fiscal Year (FY) 2024 budget, in order to show how, exactly, the middle class wouldn’t see higher taxes. But Secretary Yellen declined to commit to doing so.
4. Secretary Yellen admitted that Treasury’s proposed bank monitoring program that would surveil Americans’ personal bank transactions could not go forward without legislative approval.
Rep. Drew Ferguson (R-GA) noted to Secretary Yellen that Democrats’ attempt to create a bank surveillance program for the IRS was blocked by Republicans. He asked for assurances from the Secretary that none of the funds that are going to the IRS will be used to implement such a bank monitoring program unless it is directed explicitly by Congress. Secretary Yellen replied, “Of course not.”
5. Secretary Yellen acknowledged that many Americans are deeply concerned about the IRS’s new reporting requirements for selling used couches and concert tickets.
Rep. Carol Miller (R-WV) expressed concern about the IRS’s new reporting requirements that would force Americans to report the sale of a used couch or concert tickets. Democrats slipped the provision into the so-called American Rescue Plan without a holding a single hearing. Secretary Yellen went so far as to acknowledge that she was aware of the grave concerns of individuals and organizations. “I heard a number of concerns by individuals and organizations that this was confusing…”
6. Despite Secretary Yellen’s denials that lower- and middle-income families are paying higher taxes under President Biden, inflation has resulted in both price and wage increases that trigger higher taxes, while Americans’ hard-earned dollars lose value.
Rep. Beth Van Duyne (R-TX) noted that Americans outside of Washington, D.C., are paying more in taxes simply due to inflation caused by Democrats’ inflationary spending. She made the point that while wages may have gone up for some Americans, the dollar value has decreased, so lower- and middle-income earners that saw wage increases are stuck paying more in income taxes. Families paying higher gas prices are having to pay more in taxes on that fuel. And those who are paying more for groceries and used cars are also facing higher sales taxes on those purchases.
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