The $400,000 Lie
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The $400,000 Lie
The Inflation Reduction Act Selling Point
Damage Control
Congress has passed the Inflation Reduction Act of 2022 and President Biden has just scribbled his signature on it. It is now law.
The Biden administration has been trying to quell the cries of concerns that the government will unleash 87,000 new rabid IRS employees on the masses. On August 9th, Karine Jean-Pierre — White HouseKarine Jean-Pierre: “This is focused on those who are, you know, corporate, wealthy tax cheats that Republicans - congressional Republicans wanted to defend. That's who they wanted to defend. They wanted to defend those corporate tax cheats. This is not about - this is not about that. This is not about folks who make less than $400,000.”
Peter Doocy (Fox News’ correspondent): “So new audits on anybody making under $400,000 a year?”
Karine Jean-Pierre: “No. Very clear, no.”
Me thinks they are lying to you.
The Biden administration has repeatedly said the IRS would focus on increased enforcement activity on high-wealth taxpayers and large corporations and not target households who earn less than $400,000 a year. Amid the obvious threat to the majority of the American people and the resulting uproar, Treasury Secretary, Janet Yellen, decided to send a letter to the IRS Commissioner, Charles Rettig. In the letter Yellen tells the IRS not to use any of the new funding to increase audits of Americans making less than $400,000 a year.
“Specifically, I direct that any additional resources—including any new personnel or auditors that are hired—shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels. This means that, contrary to the misinformation from opponents of this legislation, small business or households earning $400,000 per year or less will not see an increase in the chances that they are audited.”
A letter, huh? No specific language in the bill, mind you. Just a letter that, in reality, is nothing more than a theatric statement. Yellen’s letter is damage control, an empty political promise meant to quell the justified uproar of the American people. It is a piece of paper that Yellen can point to and say, see, we really aren’t going to come after you … stop worrying for crying out loud!”
Thanks to the American Rescue Plan Act of 2021 (what a name!), the IRS has started tracking transactions of more than $600. Until this year, the tracking threshold was much higher (i.e., $20,000).
Does that sound like they won’t go after the little guys?! Again, me thinks they are lying to you.
It’s worth recalling that when the tracking of $600 transactions was just a proposal, Yellen insisted that,
“I think this proposal has been seriously mischaracterized. The proposal involves no reporting of individual transactions of any individual.”
Yeah … right. You think that’s the truth?
More Deceit
At one point the bill had specific language that stated new funding is not “intended to increase taxes on any taxpayer or small business with a taxable income below $400,000.” This says nothing about audits, but funny thing is … Congress removed that language at some point … it’s no longer there! There is no mention of limiting tax criteria nor tax “intentions” whatsoever. But that didn’t stop the establishment and the corporate press from using the language to sell the lie.
The summary of the bill on the Senate Democrats website was sneakily updated on August 11th. It used to say,
“… no new taxes on families making $400,000 or less and no new taxes on small businesses.”
But now, in a tragically funny art of deception, it ambiguously states
,“Protects families and small business making $400,000 or less.”
If you can find evidence of that in the bill, I’ll send you a cookie! Good luck.
The full text of the bill is here.