> It's possible that we could actually raise government income by doing less enforcement, because $3 is the average. It would be a net gain to eliminate the ones where we're spending $1 to raise $.50 (or $0) as long as we keep the ones where we spend $1 to raise $20.
Keep in mind the likelihood that the enforcement actions we spend $1 to raise $0.50 are there to deter tens or hundreds of billions in related avoidance or fraud schemes. That's more important than the actual revenue recovered.
That's assuming those audits are actually deterring anything. The idea that significant numbers of people are looking at detailed IRS audit statistics before choosing to commit tax fraud is somewhat farfetched. Especially when they're still busting the largest offenders and offering huge bonuses to insiders for reporting fraud.
This is one of those things the media is profoundly stupid at. For example:
> Johnston and her coauthor, Andrew Joy, BS, also of Western New Mexico University, reviewed data on mass shootings amassed by media outlets, the FBI and advocacy organizations, as well as scholarly articles, to conclude that “media contagion” is largely responsible for the increase in these often deadly outbursts.
In other words, widespread media coverage of mass shootings has increased the number of mass shootings, because the perpetrators do it for the attention and seeing how much attention it gets encourages future perpetrators. So now the media does its level best not to inflame the public and give unnecessary publicity to these monsters.. or not.
It's the same kind of thing here. The deterrent effect you're looking for comes from people talking about the major tax evasion cases the IRS is winning. It gets reduced by publicly lamenting a lower enforcement budget -- which would have no effect on deterrence if nobody was talking about it.
It's way more important that people understand that the IRS is prosecuting people than whether the actual number of people they're prosecuting goes up or down. And they definitely still are.
Keep in mind the likelihood that the enforcement actions we spend $1 to raise $0.50 are there to deter tens or hundreds of billions in related avoidance or fraud schemes. That's more important than the actual revenue recovered.