The “DOGE” commission Elon Musk is running masquerades as a “government efficiency” project. Its supposed goal is to streamline the federal bureaucracy and give taxpayers more bang for the buck.
Here’s the best indicator that’s bunk: The DOGE axe-wielders are slashing staff and other resources at the Internal Revenue Service, which collects the taxes Americans rightfully owe. This will impair the agency’s ability to do its most difficult job: policing tax cheats who are often some of the nation’s wealthiest people. Falling tax revenue will lead to growing budget deficits and make the $36 trillion national debt bigger, not smaller.
The IRS has been falling behind tax cheats for years, mainly because Republicans cut the agency’s budget whenever they have control of Congress. There’s an annual “tax gap” — the amount of money people owe that the IRS fails to collect — of nearly $700 billion. That’s an enormous amount of money, almost equivalent to the whole Pentagon budget.
Shrinking the tax gap by squeezing evaders would generate desperately needed revenue without raising anybody’s tax rate. Congress wouldn’t have to pass any new laws. If the IRS could collect all the owed money, it would boost federal revenue by 14% and bring the $1.8 trillion annual budget deficit closer to $1 trillion.
Even closing the tax gap by half would be a big improvement in the government’s budget prospects.
Yet the Republican approach to the IRS has been to deprive it of resources and keep it impotent. Nobody running a normal, solvent organization would ever turn down revenue it’s rightly entitled to. But part of the GOP strategy is to “starve the beast” and shrink government revenue so that the government itself must shrink for lack of funding.
It’s also an effort to protect the craftiest, and usually wealthiest, taxpayers from paying what they owe. The Yale Budget Lab estimates that the top 5% of earners account for 53% of the tax gap, or $386 billion worth of unpaid taxes per year. The bottom 70% of earners account for just 15% of the tax gap, or $107 billion in unpaid taxes.
Most workers in the United States get paid through an employer that withholds federal taxes, making it hard to cheat for most people living off a paycheck. Wealthier people have more income from investments, business revenue, asset sales, foreign transactions, and other sources that are less clear-cut — and therefore harder to tax than an annual salary or hourly wage. That provides numerous opportunities for creative accounting, aided by the armies of accountants and tax attorneys wealthy Americans employ.
