Representative Kevin McCarthy, Republican of California and the minority leader, mounted his case against President Biden’s social spending bill in a record-breaking speech that stretched for more than eight hours from Thursday to Friday.
Here’s a fact check of some of his remarks.
What Mr. McCarthy Said
“Just a few weeks ago, Congresswoman Abigail Spanberger said nobody elected Joe Biden to be F.D.R. This even spends more than F.D.R. while he was fighting a world war.”
This is misleading. Spending and tax cuts in the bill will add up to about $2 trillion over 10 years, and could snowball into $4 trillion if shortened programs are extended.
That is indeed a larger dollar amount than the New Deal programs passed under President Franklin D. Roosevelt, which cost about $800 billion after adjusting for inflation, according to a report from the Federal Reserve Bank of St. Louis. But World War II itself cost about $5 trillion.
noted in September that the proposal would result in increased audit rates for everyone, with high-income earners facing the largest increase.
The bill does not contain any specifics directing how audits would be spread among taxpayers of different incomes, and the Biden administration and Republicans disagree on how it would play out.
said in a May report about the proposal that tax audit rates would not rise for those earning less than $400,000 since the “compliance proposals are designed to ameliorate existing inequities by focusing on high-end evasion.”
A spokeswoman for Mr. McCarthy pointed to calculations from Republicans on the House Ways and Means Committee that compared historical audit data.
In the past decade, tax audit rates have fallen for higher-income earners and have stayed relatively stable for lower-income earners, which the Treasury Department attributed to the I.R.S.’s diminished resources and inability to retain specialized auditors needed to examine the filings of the wealthy.
The I.R.S. examined 1.4 million individual income tax returns in 2010, about 1 percent of the total number filed. In 2018, the latest year with available data, audits decreased to 370,000, or about 0.2 percent.
The Congressional Budget Office estimated that the bill would return enforcement to its 2010 levels. Doing so would indeed result in about 1.2 million more audits, and about 580,000 of those would affect people making less than $75,000.
But that is because a vast majority of tax filers — about 70 percent — make under that threshold. Looking at what fraction of returns are examined by income group, rather than the sheer number, shows that wealthier taxpayers would have a better chance of being audited than lower-income earners under the Democrats’ proposal.
Under 2010 levels of enforcement, about 0.5 percent of returns reporting between $1 and $75,000 in income would be audited, as would 1 percent of those with more than $75,000 in income. In comparison, those rates were 0.3 percent and 0.1 percent in 2018. For those making more than $10 million, more than 20 percent of returns would be examined under 2010 levels, compared with 5.3 percent in 2018.