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Illustration: Sarah Grillo/Axios

The Biden administration is aggressively defending its plan to invest $80 billion in the IRS to bring in an estimated $700 billion in new revenue, a memo obtained by Axios shows.

Why it matters: President Biden and his team view tax enforcement as one of the most politically palatable ways to help pay for their new spending plans, from universal preschool to free community college — especially in light of Republican criticism.

  • The memo shows the White House is coordinating its strategy with congressional allies and outside groups.
  • Collectively, they seek to dispel what they call “several pernicious myths” about enhanced reporting requirements.

Between the lines: The memo reads:

  • “Fact: This proposal does not mandate reporting of individual transactions to the IRS. ... The president’s proposal requires that banks report the most basic, high-level information on account inflows and outflows.”
  • While Rep. Richard Neal (D-Mass.), chairman of the House Ways and Means Committee, supports the administration’s proposal, he didn't include any new bank reporting requirements in his initial bill.
  • Conservative groups have seized on the plan by running ads against Democratsand Republicans — claiming Biden plans to unleash an army of snooping IRS agents.

But, but, but: Simply giving the agency more money to hire more agents won’t capture the amount of revenue the White House estimates is lost by Americans who underreport their earnings, known as the tax gap.

  • To close it, the Treasury Department needs new authorities, as well as cooperation from the banks.
  • Information-sharing would help it gather general information about account irregularities, such as an account showing $10,000 in income but $1 million routinely flowing in and out.
  • “Having this summary information will help flag for the IRS when high-income people underreport their income,” the memo states.

The big picture: Democrats are increasingly divided about how much revenue they can actually raise to fund their new priorities.

Go deeper: Treasury Secretary Janet Yellen weighed into the intra-party fight on Wednesday by asking Neal to include the new reporting requirements in emerging infrastructure legislation, the Washington Post reported.

  • “A reporting regime that is broad-based will better assist the IRS in targeting enforcement priorities on the high-end who accrue income in opaque ways,” Yellen wrote in her letter to the chairman.

Go deeper

22 hours ago - Politics & Policy

Pelosi expects “billionaire’s tax” to pay for Biden social spending

Photo: Yasin Ozturk/Anadolu Agency via Getty Images

House Speaker Nancy Pelosi (D-Calif.) said Sunday she expects the chamber to pass the bipartisan infrastructure plan by week’s end, and alternatives to corporate tax hikes and a “billionaires tax” will be used to finance President Biden’s promised expansion to the social safety net.

Why it matters: Pelosi’s comments come as House and Senate leaders try to wrap up a deal. What will get cut — and how the remainder will be paid — are linchpins to a final agreement.

Gaming CEO calls on industry to help fight climate change

"Catalyst Black." Screenshot: Super Evil Megacorp

Gaming CEO Kristian Segerstrale is calling on leaders in his industry to take action on climate change, after completing a $1.4 million fundraising campaign this summer.

Why it matters: Gaming's pandemic-fueled boom creates an opportunity, and maybe even an obligation, to do some good.

3 hours ago - World

U.S. releases updated vaccination, testing rules for foreign travelers

Photo: Patrick T. Fallon/AFP via Getty Images

Foreign travelers will be allowed entry to the U.S. beginning Nov. 8 if they can provide proof of full COVID-19 vaccination with a shot authorized by the World Health Organization and a negative test within three days of departure, the White House announced Monday.

Why it matters: The updated guidance, which exempts children under the age of 18 from the vaccine requirement, is intended to provide further clarity for airlines and foreign nationals who have been restricted from traveling to the U.S. since early 2020.

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