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Illustration: Shoshana Gordon/Axios

Key Senate Republicans are open to paying for a potential bipartisan infrastructure package with one of President Biden’s proposals: increased IRS funding to boost tax enforcement and collections.

Why it matters: By inching toward an agreement about how to pay for a portion of a potential $800 billion, “hard” infrastructure package, centrist Republicans are creating an avenue for a deal.

  • Regular taxpayers can't stand it when somebody is not paying their fair share,” Sen. Shelley Moore Capito (R-W.Va.), who's leading negotiations with the White House, told Axios.
  • “Providing IRS with more resources so that people who were evading taxes that they owe is a good idea,” said Sen. Susan Collins (R-Maine). “It is a possible pay-for."

Driving the news: After meeting with administration officials Tuesday, Capito said Wednesday the prospects of a bipartisan deal are greater than 50%.

  • She expects a White House counteroffer on Thursday or Friday.
  • “We put a lot of things on the table,” she said.

The big picture: When the White House unveiled its proposal to invest $80 billion in the IRS, it claimed that would raise $700 billion over 10 years.

  • Aides attached it to the president's secondary, $1.8 trillion American Families Plan, not his original, $2.3 trillion American Jobs Plan.
  • After Republicans balked at paying for any infrastructure projects by raising the corporate tax rate, as Biden initially proposed, administration officials indicated the tax enforcement revenue could be used instead to pay for traditional infrastructure projects.
  • "You need equity in the tax code, and the fact that you got a lot of people either not paying their taxes, or making a pile of money, doesn't speak of equity — so I'm for it," Sen. Jon Tester (D-Mt.) said.
  • A conservative anti-tax group is zeroing in on Biden's IRS tax proposal as a means to sink his tax-and-spend infrastructure package, preying on the fears of small-business owners.

Between the lines: Republicans and the White House still disagree about how much revenue tax enforcement would actually raise.

  • Progressive economists say the number may be closer to $1 trillion, but that figure has been met with skepticism from both parties.
  • “I don't think anybody really thinks that's a true number,” Capito said.

The bottom line: More money for the IRS isn't a silver bullet for figuring out how to pay for new roads, bridges and waterways. And the numbers have to add up.

  • You shouldn't put a stretch number on it,” Sen. Tim Kaine (D-Va.) told Axios. “You should try to be realistically conservative on the amount.”

Go deeper

May 19, 2021 - Politics & Policy

Conservative group targets Biden IRS plan

Courtesy: Coalition to Protect American Workers

A conservative anti-tax group views President Biden’s proposal to increase funding for the Internal Revenue Service as a means to sink his tax-and-spend infrastructure package.

Why it matters: By launching a six-figure cable and local TV buy for an ad against first-year Rep. Carolyn Bourdeaux (D-Ga.) and Rep. Conor Lamb (D-Pa.), the group is testing a broader potential line of attack against the $2.3 trillion package.

May 18, 2021 - Axios Twin Cities

Divided Minnesota legislature reaches budget compromise

A budget deal is done, but a lot is yet to be hammered out at the Minnesota Capitol. Photo: Stephen Maturen/Getty Images)

Minnesota's divided state government has reached a compromise on targets for a $52 billion budget, but plenty of major policy decisions still need to be worked out before the House and Senate meet again for a June special session to approve the deal.

  • "I think of this as a numbers-only agreement," Melissa Hortman, DFL speaker of the house, said at a news conference Monday.

35 Republicans vote in favor of Jan. 6 commission

Pro-Trump rioters at the U.S. Capitol building on Jan. 6, 2021. Photo: Eric Lee/Bloomberg via Getty Images

The House of Representatives voted 252-175 on Wednesday to pass a bill to set up a bipartisan 9/11-style commission to investigate the deadly Jan. 6 Capitol riots.

Why it matters: Minority Leader Kevin McCarthy and GOP leadership oppose the commission, but 35 House Republicans voted in support of the bill, underscoring the fault lines within the party in the aftermath of the insurrection.