SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
tax code
Senate Democrats Say DOGE Has 'No Right to Hoover up Taxpayer Data' at IRS
Operatives of Elon Musk, warned Sen. Elizabeth Warren, "are attempting to access confidential tax information—tax returns, bank data, Social Security numbers—for millions of Americans."
Feb 17, 2025
As Americans prepare to file their taxes ahead of the April 15 deadline, two Democratic senators warned Monday that billionaire tech mogul Elon Musk's arrival at the Internal Revenue Service raises serious privacy concerns and could significantly impact the tens of millions of people who count on their tax refunds each year to pay bills, pad their emergency savings, and afford other essentials.
The Department of Government Efficiency( DOGE), the advisory body created by President Donald Trump and headed by Musk, has set its sights on the IRS as it works to gut agencies across the federal government—with the data of millions of ordinary taxpayers now among the troves of personal information DOGE is trying to seize.
As The Washington Postreported, the IRS is considering a memorandum of understanding (MOU) to give DOGE employees access to agency systems and datasets including the Integrated Data Retrieval System (IDRS).
The system allows a limited number of IRS employees to access IRS accounts of every individual taxpayer, business, and nonprofit in the country, including people's personal identification numbers and bank information, and enables them to change transaction data.
DOGE's "meddling with IRS systems in the middle of tax filing season could, inadvertently or otherwise, cause breakdowns that may delay the issuance of tax refunds indefinitely," said Sens. Elizabeth Warren (D-Mass.) and Ron Wyden (D-Ore.).
The MOU states that Gavin Kliger, a software engineer working with DOGE, should have access to the IDRS, enabling DOGE to "eliminate waste, fraud, and abuse, and improve government performance to better serve the people."
According to the memo reviewed by the Post, Kliger—who sources said had not officially been granted the access mentioned in the MOU as of Sunday night—will be tasked with consulting on modernizing the IRS' systems.
Even though outside contractors are used for technical upgrades or fixes to a system widely recognized as "antiquated," the Post noted that it is "highly unusual" for a political appointee of partisan body like DOGE to obtain access to the IDRS.
"The information that the IRS has is incredibly personal," Nina Olson, who served as the agency's national taxpayer advocate for nearly two decades, told the newspaper. "Someone with access to it could use it and make it public in a way, or do something with it, or share it with someone else who shares it with someone else, and your rights get violated."
In their letter to acting IRS Commissioner Douglas O'Donnell, Warren and Wyden (D-Ore.) noted that the tax code has long prohibited "executive branch influence over taxpayer audits and other investigations."
"These prohibitions have long prevented political appointees in previous administrations from accessing the private tax records of hundreds of millions of Americans, and allowing DOGE officials sweeping access these systems may be in violation of these statutes," said Warren and Wyden, who serve as ranking members of the Senate Banking, Housing, and Urban Affairs and Senate Finance Committees, respectively. "Violations of these taxpayer privacy laws, including unauthorized access to or disclosure of tax returns and return information, can result in criminal penalties, including incarceration."
Without naming Trump, the lawmakers referenced Charles Littlejohn, the IRS contractor who was sentenced last year to five years in federal prison for leaking the president's tax returns to The New York Times after Trump refused to publicly disclose them.
"Until we fought to the Supreme Court and won, the president shielded his tax returns from the people," said the Democrats on the House Ways and Means Committee in a social media post. "Now, he's given yours to the richest man in the world."
Warren and Wyden wrote that "software engineers working for Musk seeking to gain access to tax return information have no right to hoover up taxpayer data and send that data back to any other part of the federal government and may be breaking the law if they are doing so."
In addition to seeking access to the personal financial data of millions of Americans, DOGE is reportedly preparing to oversee the firing of 10,000 probationary employees at the IRS.
"Any delay in refunds could be financially devastating to millions of Americans who plan their budgets around timely refunds every spring," said Warren and Wyden. "We demand that the IRS immediately clarify the extent to which DOGE team members may have inspected or be seeking to inspect the private tax return information of millions of Americans and whether taxpayer privacy laws are being enforced to prevent unauthorized disclosure and intrusions."
Keep ReadingShow Less
'There Will Be Pain': How Trump Tax Giveaways to the Rich Hurt Small Businesses and Working People
"Congress has a choice—they can either extend a failed policy or create tax reform that actually works for Main Street and communities."
Feb 13, 2025
As the Trump administration and congressional Republicans pursue trillions of dollars in new tax giveaways for wealthy individuals and corporations, economists and pollsters this week are warning about how devastating the GOP's plan would be for small businesses and working families.
There Will Be Pain is the matter-of-fact title of a Thursday report from Josh Bivens, chief economist at the Economic Policy Institute (EPI). It details how extending the expiring provisions from the tax law that Republican lawmakers passed and Trump signed in 2017 "will have painful trade-offs for the U.S. economy and most Americans."
"The U.S. 'fiscal gap'—how much taxes need to be raised or spending cut to keep public debt stable as a share of gross domestic product—was entirely created by the Republican tax cuts of 2001, 2003, and 2017," Bivens wrote. "The 'tax gap'—the amount of taxes owed but not paid each year—is currently larger than the overall fiscal gap. It is driven by the richest U.S. households and businesses cheating the law and underpaying taxes."
Extending the Tax Cuts and Jobs Act (TCJA) provisions, currently set to expire at the end of this year, "would increase the fiscal gap by nearly 50%, from 2.1% to 3.3%," Bivens explained. "No matter how these tax cuts are financed, the result will hurt most working families, especially low-income households."
"Cuts to key social insurance and income support programs like Supplemental Nutrition Assistance Program (SNAP, commonly called food stamps) or Medicaid would do substantial damage to the nation's future workforce by depriving millions of children today of key health and developmental supports," he warned.
"Further, cuts of this size, if phased in quickly, would at minimum require the Federal Reserve to aggressively cut interest rates to avoid a recession," Bivens continued, "and could quite easily overwhelm any attempt by the Fed to buffer the economy from their effect, leading to recession and job losses."
The Republican playbook offers normal people crumbs and gives the cake to the rich. Extending Trump's 2017 tax cuts will give the bottom 60% $1.10 per day - but will give the top 1% $165 per day. Paying for this generosity to the top will cost working families dearly.
— Economic Policy Institute ( @epi.org) February 13, 2025 at 12:21 PM
Bivens argued that "expanding public investment and raising federal revenue via taxes that mostly come from high-income households is the most optimal way to close fiscal gap, boost economic productivity, and produce a fairer economy."
"If TCJA expansions for the rich are inevitable, this leaves three options: running deficits, increasing regressive taxes (in the form of tariffs, for example), or spending cuts," he added. "While none of these options is ideal, running deficits has the potential to be less harmful for American families, whereas regressive taxation and spending cuts will categorically cause the most harm."
The think tank published Bivens' report as a national coalition, Small Business for America's Future, released its findings from a survey of 863 small business owners' sentiments on the tax code, conducted from mid-December to late January.
The survey shows that just 3% of small business owners hired more workers as a result of the TCJA, 6% increased investments or employee wages, and 9% were able to pay down debts. Meanwhile, 43% reported no positive impact from the 2017 law.
The coalition found that small business owners are critical of the U.S. tax code in general and the TCJA specifically. Of those surveyed, 91% of said the tax code "favors large corporations over small businesses" and 76% report that wealthy individuals and big companies benefited most from the 2017 law, which critics have long called the "GOP Tax Scam."
The TCJA's small business pass-through deduction lets owners exclude up to 20% of their qualified business income from federal income tax. However, critics have called it complex and the survey shows that 39% of owners weren't sure if they claim the benefit.
The survey also highlights solutions that are popular with owners, such as exempting the first $25,000 of profit from federal income tax, creating a simplified standard deduction, making the tax code less complicated, and modernizing the Internal Revenue Service. Additionally, 61% of respondents support raising the corporate tax rate to pay for new small business tax benefits.
"By slashing the corporate tax rate permanently from 35% to 21%, while offering most small business owners only a temporary and complex 20% tax deduction, the TCJA created a two-tier tax system that overwhelmingly favored large corporations," said Walt Rowen, co-chair of Small Business for America's Future and president of the Susquehanna Glass Company in Pennsylvania.
"This isn't just hurting business owners—it's failing workers, families and local economies in every community across the country," Rowen added. "Now, Congress has a choice—they can either extend a failed policy or create tax reform that actually works for Main Street and communities."
The GOP controls the White House and both chambers of Congress, but those surveyed by the coalition were divided in terms of political parties: 23% said they didn't know or preferred not to say while 29% identified as Republicans, 25% as Democrats, and 19% as Independents. More than three-quarters were age 55 or older, 56% were white, and just over half were men. A quarter of owners listed themselves as the only employee, and nearly half had just 1-10 workers.
"Small businesses create jobs, drive innovation, and provide essential services in every community across America. But this law has done nothing to help them fulfill their potential," said Anne Zimmerman, a coalition co-chair and certified public accountant in Ohio. "When nearly 40% of small business owners can't even determine if they received the law's main small business tax deduction, while large corporations got an immediate and permanent tax cut, something is fundamentally wrong with our approach."
The small business survey and EPI's report followed polling released Tuesday by Data for Progress, Groundwork Collaborative, and the Student Borrower Protection Center that shows a majority of Americans believe not only that the rich pay too little in taxes but also that lawmakers shouldn't slash popular programs to give them more tax cuts.
"Americans might not always see eye to eye, but one thing's clear: Nearly every voter—across party lines—wants to protect Medicare, Medicaid, Social Security, and SNAP," said Groundwork Collaborative. "Meanwhile, the GOP is pushing to gut them for even more tax breaks for the wealthy."
Keep ReadingShow Less
We Know How Bad Trump's Tax Policy Is, But Just How Good Will Harris' Be?
Harris wants to invest in the care economy and has signaled support for raising corporate tax rates, while Trump has been largely silent on care investments and signaled support for more tax cuts at the top.
Aug 25, 2024
U.S. Vice President Kamala Harris and former President Donald Trump have starkly different views on taxes and how the tax code can support families.
Harris voices strong support for families through investments in the care economy. She’s vowed to advance paid family leave, affordable childcare, care for disabled or aging family members, and healthcare. This could be funded with a better tax code.
These policies would help all of us care for our families and strengthen our communities. Investing public dollars in care could also narrow racial and gender pay gaps by boosting the pay of care workers—who are mostly women, and many of them women of color.
Strengthening care infrastructure would help us all thrive and make the economy stronger. But we need to collect sufficient revenue to support those transformational policies.
The Trump campaign has been largely silent on care investments. But his campaign has signaled support for more tax cuts at the top. Such cuts would increase inequality and reduce the availability of federal funding to strengthen the care economy.
We saw this in the 2017 tax law that former President Trump signed. It cut taxes for the wealthiest people and corporations, including cutting the effective tax rate for our largest corporations from an average 22% to an average 12.8%. It also preserved loopholes that allow some of the wealthiest corporations to avoid taxes on most—if not all—of their profits.
These tax cuts for the ultra wealthy led to huge losses in federal tax revenue and spiked the national debt, making it harder for the government to fund new investments in priorities that are important to families.
If reelected, Trump has said he wants to slash corporate taxes further—even though some billionaires pay a lower share of their income in taxes than nurses and teachers do.
By contrast, the Biden-Harris administration created a minimum corporate tax so the wealthiest corporations could no longer pay nothing, added a modest tax on stock buybacks, and funded the IRS to better collect taxes from corporations. These policies raised revenue for care investments and other priorities.
Going forward, Harris has signaled support for raising corporate tax rates, which are at historic lows, and closing loopholes.
Harris and Trump also have different priorities on taxes for families. As a senator, Harris championed a tax credit of $6,000 for married couples and $3,000 for single people in her Lift the Middle Class Act. This would have delivered 88% of its benefits to earners under $119,000.
Harris might not promote this specific plan going forward, but it suggests she’d aim to direct benefits to moderate earners instead of the wealthiest. More recently, she’s proposed expanding the Child Tax Credit and adding a $6,000 credit for families with newborns.
By contrast, the tax bill that Trump signed delivered more than half its benefits to the top 5% of households—those with incomes over $263,000. (Like Harris, Trump’s vice presidential nominee, J.D. Vance, has suggested a bigger Child Tax Credit. But Vance has also floated making people without children pay more taxes.)
Taxing the wealthiest and big corporations would support care investments and make our tax code more fair. Strengthening care infrastructure would help us all thrive and make the economy stronger. But we need to collect sufficient revenue to support those transformational policies.
There is strong public support for better care and for fairer taxes. Tax justice advocates should call on both the Harris and Trump campaigns to commit to a fairer tax system—and to use the money it would raise to invest in the childcare, elder care, and healthcare our families need.
Keep ReadingShow Less
Most Popular