Krugman: Holding national security hostage to help tax cheats

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Krugman: Holding national security hostage to help tax cheats
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House Republicans are demanding that funding for Israel in this moment of crisis be tied to budget cuts for the IRS

House Republicans, led by Speaker Mike Johnson, are demanding that funding for Israel in this moment of crisis be tied to budget cuts that would undermine the ability of the Internal Revenue Service to crack down on wealthy tax cheats.

A case in point is the current demand by House Republicans that funding for Israel in this moment of crisis be tied to budget cuts that would undermine the ability of the Internal Revenue Service to crack down on wealthy tax cheats. This should be a major scandal, but my suspicion is that many voters just won’t accept the idea that GOP leaders would do something so cartoonishly villainous.

The latest GOP proposal is, by any reasonable standard, even worse than these earlier initiatives. I mean, holding national security hostage unless we make it easier for wealthy tax cheats to break the law? Who would do that? First, the idea that cutting the IRS budget would somehow help pay for aid to Israel is utterly wrong. America has a huge “tax gap” — taxes legally owed but not paid. The bulk of that tax gap probably comes from wealthy Americans underreporting their incomes, which they can get away with because the IRS lacks the resources to fully enforce the law.

Furthermore, enabling tax evasion doesn’t help all businesses equally; it biases the economy toward activities, often unproductive, where tax fraud is relatively easy, such as real estate speculation. Did I mention that the Trump Organization has been convicted of tax fraud?

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