Elon’s report card

[jon-nyc]

Is there any evidence that we’ve ever had so many auditors that we had gone beyond the point where returns were positive?

There is no evidence that the IRS has ever hired so many auditors that it crossed the point of diminishing returns to the extent that returns became negative or even net neutral. All available data—from historical audit rates, enforcement spending, and revenue returns—suggests that the IRS has long been operating well below the level of maximum return.

Key points:

⸻

1. Historical Audit Trends Show Undershooting, Not Overshooting
   • Audit rates peaked in the 1960s–1980s but were still only around 1–2% of individual returns, compared to ~0.4% today.
   • Even during those higher-audit eras, enforcement revenue more than paid for itself, and there’s no indication the IRS over-audited to the point of inefficiency.

⸻

2. CBO and Treasury Projections Assume Diminishing Returns — and Still Show High ROI
   • Models from the CBO, Treasury, and academic economists already account for diminishing marginal returns, yet they continue to estimate ROI in the 2:1 to 10:1 range.
   • That suggests we are nowhere near the point where returns flatten out completely, let alone turn negative.

⸻

3. Post-2010 IRS Cuts Reduced Audit Rates — and Revenue
   • The IRS enforcement workforce shrank ~30% from 2010 to 2020.
   • Over that period, the tax gap grew significantly, particularly among high-income filers.
   • If the IRS had previously been overstaffed, cutting auditors would have improved efficiency or held revenues steady—but the opposite happened.

⸻

4. Academic Studies Suggest the Real “ROI Frontier” Is Far Ahead
   • Guyton et al. (2021) found that auditing high-income earners yields extremely high returns, and the IRS currently audits them at historically low rates.
   • This suggests that expanding targeted audits could still produce high marginal returns before hitting any true “ceiling.”

⸻

5. No Published Evidence of Net Revenue Decline from Over-Auditing
   • Despite ideological claims of IRS “overreach,” no peer-reviewed study or government report has documented a revenue drop attributable to excessive auditing.

⸻

Bottom Line:

There’s no historical or contemporary evidence that the IRS has ever reached an enforcement staffing level where returns turned negative. On the contrary, the evidence overwhelmingly suggests that the agency is far below optimal staffing, especially for auditing complex, high-yield cases.

Would you like a graph of historical audit rates vs. enforcement revenue?

[Horace]

So it's just an obviously stupid thing to not hire more auditors. I never claimed flat out that it wasn't. I'm aware of obviously stupid things existing. I was only registering my skepticism. I am aware that the statistics at face value have this implication of an obviously stupid thing happening, though I've heard few point out the obvious question of "why not hire more".

[jon-nyc]

It’s not politically teneble.

We’d reduce speeding and save lives if we put traffic cameras literally everywhere or mandated that car manufactures track speeds and report violations to the police.

Good luck to the politician that proposes that. Though the corrupt officials in Yonkers seem to have come close with the speed cameras

[Horace]

@jon-nyc said in Elon’s report card:

It’s not politically teneble.

You can keep saying that, it will remain untrue. There is nothing untenable about messaging an increase in tax revenues, without increasing taxes. Actually, that would be good messaging.

We’d reduce speeding and save lives if we put traffic cameras literally everywhere or mandated that car manufactures track speeds and report violations to the police.

Good luck to the politician that proposes that. Though the corrupt officials in Yonkers seem to have come close with the speed cameras

It's not as if an increase in IRS head count needs to be part of any politician's platform. It would just be buried in some bill, and the wonks would talk about it on podcasts.

Thinking about it more, I suspect that the real reason this isn't done, is that the returns are trivial, if positive.

[jon-nyc]

I agree there exists a possible world where all the evidence is wrong and you’ve intuited the true answer. I just don’t think we live in that world.

[Horace]

@jon-nyc said in Elon’s report card:

I agree there exists a possible world where all the evidence is wrong and you’ve intuited the true answer. I just don’t think we live in that world.

You keep hoping I'm making points other than the ones I'm making. Sorry to not leave the dunking lane open as wide as you'd like.

[jon-nyc]

Ok, Horace. People can read the thread and come to their own conclusions.

[Horace]

@jon-nyc said in Elon’s report card:

Ok, Horace. People can read the thread and come to their own conclusions.

Maybe a small handful of people will read and come to their own conclusions. More likely, nobody will read. (Especially not your AI dumps.) Meanwhile, you would be unable to put a point I've made into your own words and demonstrate where it's wrong. Skepticism is not a factual claim. I also posited this, which ties everything up into a neat bow, but which is just a guess:

Thinking about it more, I suspect that the real reason this isn't done, is that the returns are trivial, if positive.

So go ask Grok what the actual returns are. How much revenue are we going to lose by losing those auditors due to DOGE, how much would be stand to gain by rehiring them and then hiring some more?

[taiwan_girl]

I read this thread. LOL

[Horace]

@taiwan_girl said in Elon’s report card:

I read this thread. LOL

I would never have recommended that.

[LuFins Dad]

[Horace]

[Doctor Phibes]

I came to my own conclusions.

I didn't read the thread.

[jon-nyc]

[jon-nyc]

[Horace]

[Horace]

@Doctor-Phibes said in Elon’s report card:

I came to my own conclusions.

I didn't read the thread.

Wise.