IRS Funding: Coercion, Not Investment

A popular left-wing thought leader recently claimed that for every dollar the U.S. government gives the IRS, we get six or seven dollars back. He called this a “return on investment.” It’s a common talking point among progressives who argue for increasing IRS enforcement, but the claim doesn’t hold up under scrutiny. In fact, it’s a rhetorical sleight-of-hand that distorts both language and economics.

The Government Doesn’t Create Wealth

At the core of the issue is a basic truth: the government does not create wealth. It does not generate value the way the private sector does. It doesn’t build businesses, invent products, or offer services based on market demand. It doesn’t operate with risk, reward, or innovation. Everything the government has, it first takes—from people and businesses who earned it.

Calling that process an “investment” flips the meaning of the word. An investment is when you put resources into something that generates new value. A business invests in technology, a family invests in a home, a student invests in education. These are forward-looking, productive actions. The IRS, by contrast, is a collection agency. It doesn’t produce—it enforces. It extracts. It operates on coercion, not creation.

Taking More Isn’t the Same as Making More

Defenders of the IRS funding point to studies showing that for every dollar spent on enforcement, the agency collects multiple dollars in return. But this so-called “return” is not value generated—it’s money taken. It’s the recovery of funds that taxpayers, rightly or wrongly, didn’t hand over. That may increase the Treasury’s balance sheet, but it decreases someone else’s. One person’s return is another person’s loss.

This framing also ignores the unseen costs to citizens and the economy. Increased enforcement may drag more people into audits, legal battles, and administrative headaches. Small business owners, independent contractors, and middle-class families can bear the brunt of these efforts. More aggressive IRS tactics don’t just extract money—they stifle growth, productivity, and trust.

The State Doesn’t “Invest”—It Reallocates

The government can’t invest in the same way individuals or businesses can. It doesn’t risk its own resources—it reallocates the resources of others. It doesn’t answer to customers—it issues demands backed by law. More money for the IRS doesn’t produce more value in the economy. It just increases the government’s capacity to claim a larger share of what others have already created.

Words Matter: This Isn’t Investment

Calling IRS funding an “investment” isn’t just inaccurate—it’s manipulative. It makes enforcement sound like productivity. It masks coercion with the language of growth. If we accept this logic, then any act of taxation becomes an investment. But we know that’s not true. Investment produces. Taxation consumes.

IRS enforcement is not an investment. It’s a cost of government, and one that should be weighed carefully—not disguised behind feel-good financial language. If the state needs to collect taxes, fine—but let’s not pretend it’s generating wealth. It’s taking it.