Opinion | Leaked audio of billionaire GOP donor Steve Wynn hands Democrats a weapon

You’ve probably heard that Republicans are dissembling madly about new tax policies in the law President Biden signed this month. The Inflation Reduction Act will boost IRS funding to better target wealthy tax avoiders, and Republicans are pretending this will unleash an army of tens of thousands of IRS agents exclusively on working- and middle-class taxpayer.

That’s par for the course. But now, a billionaire GOP donor has reportedly been caught on a recording advising Republicans to amplify distortions exactly like this.

Politico obtained audio of a conference call that Republican National Committee chairwoman Ronna McDaniel held with top GOP donors, telling them their help is badly needed to win the Senate.

McDaniel advised the donors that Democrats are swamping Republicans in money, because GOP fundraising is flat with small donors. Hence big donors must step up 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 question-and-answer session, billionaire GOP donor Steve Wynn asked whether there are additional ways for very well-heeled donors to give anonymously. Wynn also urged Republicans to crank up the messaging that Democratic tax policies will primarily hammer working-class people, per Politico:

The billionaire also offered up some messaging advice. Republican candidates, he said, should run aggressive TV ads casting Democrats as advocates of tax policies that would hurt lower-wage earners and small businesses.

“Hard-hitting kind of spots with a man’s voice, no soft pedal,” Wynn suggested, before giving a sample script: “’They’re coming after you if you’re a waiter, if you’re a bartender, if you ‘re anybody with a cash business … they’re coming after you.’ “

It’s particularly perverse for a billionaire donor such as Wynn to advise Republicans to “message” in this way because the new legislation’s provisions are actually designed to target the very wealthiest Americans who benefit from business structures that require lots of IRS resources to audit. That is, people like Wynn.

To be fair, it’s not entirely clear which tax policies Wynn was referring to here. But Steve Rosenthal, a senior fellow with the nonpartisan Tax Policy Center, notes that Wynn’s claim is often made by opponents of beefing up IRS tax funding. They say such funding will inevitably mean increased targeting of low-level cash workers and cash businesses, because they are often tax avoiders.

It’s true that cash workers and small-to-midsize 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 raising at least $ 200 billion in additional tax revenue over 10 years – is specifically meant to address a problem that has been a huge boon to very rich taxpayers.

The infusion of money 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 wealthy.

As ProPublica usefully documented, when the IRS finds itself without sufficient resources and personnel, it’s outmatched by the ultrawealthy, who can hire squadrons of accountants and lawyers to help them avoid paying taxes.

Notably, while audit rates have fallen across the board in recent years, they’ve plunged the most for the wealthy. As the Government Accountability Office documented, in 2010, 21.2 percent of tax returns reporting over $ 10 million in income were audited; by 2019, that fell to 3.9 percent. Among those making between $ 5 million and $ 10 million, audits fell from 13.5 percent to just 1.4 percent.

“The lack of resources prevents the IRS from ensuring that large and sprawling operations pay their full tax bill,” Rosenthal told us. “The point of increased enforcement is to pursue these businesses.”

There’s no telling whether Wynn himself will be affected by the Inflation Reduction Act’s changes. But Wynn, who presided over casinos and properties on multiple continents, oversaw the same sort of complex business structures that potentially benefited from years of starved IRS enforcement, Rosenthal says.

“Wynn is trying to push Republicans to scare the little fish into thinking the IRS is targeting them,” Rosenthal told us, “when in fact the IRS has pledged to target the big fish.”

In short, the new policies will target members of Wynn’s class. It’s pretty revealing for Wynn to be urging Republicans to attack those policies by arguing that their real victims will be waiters and bartenders. Democrats should jump on this.