WH Econ Adviser Bernstein: We’re Not Guaranteeing No Audits for People Making Under $400,000, But I Don’t Think There Will Be Increase

On Monday’s broadcast of CNBC’s “Squawk Box,” White House Council of Economic Advisers member Jared Bernstein said that he doesn’t expect increased audits on the middle class due to increased IRS Funding in the Inflation Reduction Act reconciliation bill and vowed the newly-expanded IRS won’t be going after anyone making under $400,000 but said they aren’t guaranteeing nobody who makes under $400,000 will be audited.

Co-host Brian Sullivan asked, “How much of this is going to be just IRS tax collection? They want to double the size of the IRS. I understand the industry has been shrunk, gutted, in some people’s words. And do you expect increased audits on the middle class?”

Bernstein responded, “Certainly not on the middle class. Remember, one of the lines in the sand, for all his flexibility…President Biden has always maintained that no one under 400,000 will pay one penny more in taxes. So, line in the sand there. Look, in terms of closing the tax gap, that’s what you’re talking about here, something like 80 billion for the IRS, this raises something like 200 billion over ten years and some people call that a conservative estimate. And remember, this is enforcing taxes owed, so this is a way to, not just close tax loopholes, but to stave off tax evasion. In my strongly-held view, defunding the IRS has been a long-term shadow tax cut for tax evaders, and this president will reverse that with this bill that now goes over to the House.”

Sullivan then said, “And much of those are going to be small businesses, Jared, that — people that use S Corps.”

Bernstein responded, “Yeah, well, remember, 400,000 in the sand. Just like people — I’ve heard people talk small business on the minimum corporate tax –.”

Sullivan then cut in to ask, “I want to be clear, is the president guaranteeing nobody making under 400,000 will get audited?”

Bernstein answered, “No, no, no. That’s not what I said. Nobody under $400,000 will pay higher taxes under the Inflation Reduction Act. Let’s be very clear about that.”

After Bernstein started talking about the corporate minimum tax, Sullivan asked, “If you’re doubling the size of the IRS, then who are they going to go after?”

Bernstein responded, “Nobody under 400k, whether you’re a small business or an individual pays a penny more in taxes.”

On Tuesday, White House Press Secretary Karine Jean-Pierre promised that there won’t be any new audits on anyone making less than $400,000.

Follow Ian Hanchett on Twitter @IanHanchett


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