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House GOP Bill Pairs Israel Military Aid With IRS Cuts That Help Rich Tax Cheats

Critics slammed the bill, which would strip $14.3 billion in funds from the IRS.

Newly elected U.S. House Speaker Mike Johnson wields the gavel in the House Chamber in Washington, D.C., on October 25, 2023.

House Republicans released legislative text on Monday that pairs around $14 billion in military aid for Israel with steep cuts from Internal Revenue Service funding that has given the agency more capacity to pursue wealthy tax cheats.

The GOP bill would strip $14.3 billion in funds from the IRS, a move that would undercut the agency’s renewed enforcement push and nix efforts to build out a free digital tax filing system to compete with private tax-prep firms, which have lobbied aggressively against the IRS alternative.

While the House GOP’s proposed IRS cuts were widely presented as “offsets” for the new aid for Israel’s military, such cuts would in fact add to the federal deficit by depriving the agency of resources to collect taxes from rich tax dodgers who are costing the U.S. tens of billions in revenue.

“Every $1 you cut IRS funding will lose about $2 of revenue,” noted Marc Goldwein of the conservative Center for a Responsible Federal Budget. “So that means this bill would add about $30 billion to the deficit.”

The IRS said earlier this month that it has collected $160 million in back taxes from millionaires this year thanks to new enforcement funding provided under the Inflation Reduction Act. The agency also recently launched an initiative aimed at cracking down on tax dodging by large corporations.

Senate Finance Committee Chair Ron Wyden (D-Ore.) argued on social media late Monday that “House Republicans are using aid for Israel as a political pawn in order to slash taxes for their wealthy donors.”

“Making it easier for rich people to cheat on their taxes isn’t an offset, it adds to the deficit,” Wyden wrote.

House Republicans’ bill comes in response to President Joe Biden’s request for $14.3 billion in military aid for Israel as part of a broader $106 billion emergency funding request that also called for military assistance for Ukraine, disaster relief in the U.S., and some humanitarian aid for Gaza that human rights advocates say could bolster Israeli efforts to forcibly displace Palestinians.

The GOP legislation, which is likely dead on arrival in the narrowly Democratic U.S. Senate, only contains funding for Israel.

The bipartisan push to approve new military aid for Israel comes despite warnings from legal experts that the U.S. could be complicit in genocide and other war crimes against Palestinians in Gaza.

Israel’s bombing campaign has killed more than 8,000 people — including more than 3,400 children — and sparked a humanitarian catastrophe, displacing more than a million Gazans, destroying or damaging roughly 40% of the territory’s housing units, and pushing the enclave’s healthcare system to the brink of total collapse.

The National Priorities Project cautioned in response to Biden’s supplemental funding request that “more military aid to Israel will mean more deaths.”

“In the face of massive suffering in Gaza and disregard for international law by the Israeli government, the U.S. must not provide additional military aid or weapons that would cause more deaths,” the group said. “Instead, the U.S. should use its considerable diplomatic strength to call for an immediate cease-fire.”

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