Washington, D.C. — On May 15, the Trump administration and DOGE will reportedly implement the largest staffing cut at the IRS since major probationary layoffs were announced earlier this year. While DOGE purports its mission is to improve government efficiency and work toward addressing the nation’s fiscal challenges, a new Center for American Progress analysis finds that the Trump administration’s cuts to IRS enforcement could cost the federal government nearly $1 trillion in lost net revenue over the next 10 years. While previous studies have found cuts to IRS resources would reduce revenues, CAP’s estimates account for recent developments and predict an even greater threat to the nation’s tax system and fiscal health.
This new CAP analysis quantifies the size and scope of the IRS reductions and how these staffing cuts will cost the federal government far more than what they will offer in savings. In addition to these estimates, the column highlights how cutting IRS staff will yield a less fair tax system and render our country’s finances less stable.
“In my more than 40 years in public service, I have come to realize that some calls are close. Some are not. This is in the latter category. There is no policy justification for weakening the tax system and decimating the IRS. The IRS will lose revenue but we all will lose as well—not just in access to a tax system that is able to serve us the way we deserve but also in our collective faith and trust that the tax laws will be fairly administered,” said Lawrence H. Summers, former Treasury secretary.
“CAP’s estimate of nearly $1 trillion illustrates the tremendous losses that will result from the Trump administration’s unprecedented cuts to the IRS. These staffing cuts are doing harm, not producing savings. It leaves the IRS modernization effort in flux and costs revenues that go to vital public services, such as programs ensuring our food and water are safe or keeping our country secure. It’s reckless and will make our tax system even less fair,” said Sara Estep, economist for Inclusive Economy and author of the analysis.
Read the analysis: “The Fiscal Impacts of IRS Staffing Cuts” by Sara Estep
For more information or to speak with an expert, please contact Sarah Nadeau at [email protected].