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Floor Speech
The far right has had an awful lot to say about the IRS in these last few days. Even Senators who should supposedly know better are spinning wild fantasy stories about 87,000 agents who are armed to the teeth and coming to the doors of innocent small business people. All this talk is unscathed by the truth.
Here is what is true: Every year, wealthy tax cheats and scofflaw corporations skip out on paying what they owe and rip off the American people for billions and billions of dollars. Let me say that again. Wealthy tax cheats are ripping off innocent taxpayers, every year, of billions and billions of dollars. They are sophisticated. They are wealthy. They want to protect the status quo. By attacking the IRS, the Republicans are helping high-flying tax cheats get away with breaking the law.
The IRS has had its resources gutted by the Republicans over the last decade. It is badly outmatched now by the wealthy tax cheats, who have armies of lawyers and accountants who are prying open loopholes and hiding income in the shadows. Let me give the Senate an example.
A few weeks ago, I put out the findings of a yearlong Finance Committee investigation into the largest alleged tax evasion scheme by one individual in American history. With the right financial wizardry and a complicated network of offshore accounts and partnerships, this individual, Robert Brockman, was able to evade taxes on over $2 billion in income. To hide his money, he set up offshore entities that we call shell banks. They were offshore entities dressed up like financial institutions that Mr. Brockman set up to hide his money from the IRS, betting correctly that the IRS wouldn't have the resources to uncover his scheme. There may be hundreds of thousands more of these shell banks that the IRS has never examined.
The Finance Committee is also in the midst of an investigation into the tax practices of some of the biggest members of Big Pharma. One of the companies whose tax data we examined was AbbVie. In 2020, 75 percent of AbbVie's sales were made in the United States, but AbbVie reported only 1 percent of its income to the United States for tax purposes. Earlier this year, we requested financial information from Merck, which makes nearly half of its sales in the United States, but it reported only 14 percent of its income here. We also requested information from Bristol Myers Squibb, which reportedly used a thicket of foreign subsidiaries and partnerships to take its effective tax rate from 24.7 percent all the way down to a negative 7 percent in a single year.
The IRS struggles to do anything about many of these cases even when they get reported in the press. Criminal tax evasion cases have fallen nearly by half. The number of highly trained experts who know how to break down these complex tax evasion cases has fallen by a third. It takes hundreds and hundreds of hours to review the tax filings of corporations and the rich, and the IRS just doesn't have the resources to go after these wealthy tax cheats and scofflaw corporations. So there is a reason the Democrats believe you have to invest more resources to enforce the laws on the books.
Here is the most important point: It doesn't have anything to do with middle-class taxpayers, because their taxes are taken out automatically of every single paycheck. That is really different than the way the big guys go about their activities in ripping off the little guys with complex tax evasion schemes. What so many Republicans want to do is preserve the status quo so that only the little guys get audited while billionaire friends like Robert Brockman get off scot-free.
Funding for the IRS is also about providing a basic level of customer service to taxpayers who are in Colorado, in Oregon, and in every part of the country. At one point during the filing season this year, the IRS told the Finance Committee that it was able to answer only 11 percent of the service phone calls it was receiving. Taxpayers in America deserve better service from their government, and that means making sure the IRS has the resources to provide it.
The far right and the tax cheats--the wealthy tax cheats--want the IRS, apparently, to continue to struggle because it makes it easier to attack and vilify. That is why we have heard so many falsehoods about the thousands of new IRS agents. I don't know where this number came from. It is absolute nonsense that has been conjured out of nothing.
Even worse are the falsehoods about IRS agents and firearms. Alongside the DEA, the FBI, and other law enforcement Agencies, the IRS often plays a part in going after drug cartels, money launderers, and other serious, hardened criminals. So the question is, How do my Republican colleagues expect IRS criminal investigation officers to defend themselves during drug busts against violent cartels? Should they bring a set of sharpened No. 2 pencils?
We are talking about living in the real world. The IRS funding that the Democrats passed last month is about making sure that the IRS can do its job and meet the expectations of the American people.
I can tell you, as a Senator who has townhall meetings in every county of my State every year, the people of my State say: Look, we are law-abiding. We pay our taxes. There is something way out of whack when these wealthy tax cheats and scofflaw corporations can pay little or nothing.
It is time for Members of Congress to stop going to bat for these wealthy tax cheats who break the law. The IRS needs to be able to crack down on these rip-offs. The IRS needs to be able to provide adequate and timely service. The taxpayers need help, and that is what the IRS funding does.
What we have heard so much about from my colleagues on the far right in raising this specter of agents--thousands of them, armed to the teeth, coming to the doors of small businesses--is simply unscathed by the truth.
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Mr. WYDEN. Mr. President, I would just like to briefly discuss the amendment that came up during the budget discussion.
Senate Democrats made it very, very clear that we were strongly against taxing those in our country with incomes under $400,000. The problem with the amendment that the Republicans offered is they used the word ``taxable'' income. So, while we strongly opposed raising taxes on middle-class people and others making under $400,000, the wording of the Republicans' amendment, which talked about taxable income, could have immunized billionaires from being subject to an audit. That is because, as the Presiding Officer and I have talked about, billionaires often live by this ``buy, borrow, and die'' philosophy, and they have little or no taxable income for years on end. My colleagues probably saw some of the stories, for example, about billionaires who are claiming the child tax credit because their taxable income is actually low under the way it is defined.
Just to make sure the record is clear, we are all in on this effort of not taxing middle-income folks. We subscribe completely. In fact, it is what we had in the bill, and our enforcement section made that clear as well. But we are not for creating new paths to tax evasion for billionaires. Regrettably, that is what the language in the Republicans' amendment would have done.
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