This is normal for the course. But now a billionaire GOP donor has reportedly been caught on a recording advising Republicans to amp up distortions just like that.
Politico obtained the audio of a conference call Republican National Committee Chair Ronna McDaniel held with top GOP donors, telling them their help was badly needed to win the Senate.
McDaniel informed donors that Democrats are flooding Republicans with money because GOP fundraising is flat with small donors. Therefore, big donors need to step in and bail out GOP candidates by giving directly to their campaigns, McDaniel told them.
But buried in the Politico story is another revelation.
Specifically, Politico reports, during the Q&A, billionaire GOP donor Steve Wynn asked if there were other ways for super-high-net-worth donors to donate anonymously. Wynn also urged Republicans to get the message across that Democratic tax policies will primarily hit working people, according to Politico:
The billionaire also offered messaging advice. Republican candidates, he said, should air aggressive television ads portraying Democrats as advocates of tax policies that would hurt low wages and small businesses.
“The kind of punchy spots with a man’s voice, no soft pedal,” Wynn suggested, before giving an example script: “‘They come after you if you’re a waiter, if you’re a bartender, if you’ does anyone have a cash business… they’re going after you.’
This is particularly perverse for a billionaire donor such as Wynn to advise Republicans to “send a message” in this way because the provisions of the new legislation are actually designed to target wealthier Americans who benefit from business structures that require extensive IRS resources to audit. In other words, people like Wynn.
To be fair, it’s not entirely clear what tax policies Wynn was referring to here. But Steve Rosenthal, a senior fellow at the nonpartisan Tax Policy Center, notes that Wynn’s assertion is often made by opponents of increased tax funding for the IRS. They say such funding will inevitably mean increased targeting of low-level cash workers and businesses, as they often avoid tax.
It is true that cash workers and small and medium cash businesses are sometimes part of the tax avoidance problem. But the new policy — which would spend $80 billion on IRS enforcement, with the goal of generating at least $200 billion in additional tax revenue over 10 years — is specifically aimed at addressing a problem that has been a boon for the very wealthy taxpayers.
The cash injection is necessary because the IRS has been the target of an extraordinarily successful campaign to defund it. Who benefits most from an underfunded IRS? The rich.
As ProPublica has helpfully documented, when the IRS finds itself without sufficient resources and staff, it is outmatched by the ultra-rich, who can hire squads of accountants and lawyers to help them avoid paying taxes. .
Notably, while audit rates have fallen across the board in recent years, they have plunged the most for the wealthy. As documented by the Government Accountability Office, in 2010, 21.2% of tax returns reporting more than $10 million in revenue were audited; in 2019, this figure fell to 3.9%. Among those earning between $5 million and $10 million, audits fell from 13.5% to just 1.4%.
“Lack of resources prevents the IRS from ensuring that large, sprawling operations pay their entire tax bill,” Rosenthal told us. “The purpose of increased enforcement is to prosecute these companies.”
It is unclear whether Wynn himself will be affected by changes to the Inflation Reduction Act. But Wynn, who has presided over casinos and properties on multiple continents, has overseen the same kind of complex business structures that have potentially benefited from years of starving enforcement from the IRS, Rosenthal says.
“Wynn is trying to trick Republicans into scaring the little fish into thinking the IRS is targeting them,” Rosenthal told us, “when in fact the IRS is committed to targeting the big fish.”
In short, the new policies will target members of Wynn’s class. It’s telling enough for Wynn to urge Republicans to attack these policies by arguing that their real victims will be waiters and bartenders. Democrats should jump on it.