A controversial proposal has been floated on Capitol Hill that seeks to require financial institutions to report inflows and outflows from all accounts with a value of at least $600 to the IRS.
Designed to identify unreported income, the proposal is getting push back from Republican lawmakers, including Congressman Michael Guest who says it would infringe on individual privacy rights.
“This proposal is simply grasping at straws in an attempt to provide cover for the huge spending proposals Congressional Democrats are pursuing. There is no evidence that the IRS data collection proposal is effective at closing the ‘tax gap’ – the difference between taxes paid and taxes owed by law. Furthermore, the proposal would sacrifice American privacy for the sake of government revenue, an ineffective and Orwellian strategy of offsetting government spending, especially when other methods remain available,” Guest said. “Following the invaluable service our financial institutions provided to keep our nation afloat during the pandemic, this proposal to help fund a multi-trillion-dollar spending proposal at the cost of Americans’ privacy is a downright betrayal of our financial institutions and the American people and should not be implemented.”
Treasury Secretary Janet Yellen said in a letter to the House Ways and Means Committee that the proposal is meant to ensure that “tax evaders are not able to structure financial accounts to avoid it” and would not be used to target ordinary Americans.
According to the Treasury, the potential change to “the third-party information reports are estimated to generate $460 billion over a decade.”
State Treasurer David McRae has also taken expedition to the proposed rule and penned the following op-ed voicing his opposition.
“Under the Biden administration, the federal government’s role in our lives has become increasingly obtrusive, increasingly socialist, and increasingly concerning. What’s more, with the House of Representatives under Nancy Pelosi’s control and Chuck Schumer running the Senate, the executive overreach has gone unchecked.
As a result, the Biden administration has begun forcing individuals across the country to be vaccinated – whether they want to be or not. The White House has worked with social media companies to control what information gets posted online and who is permitted to post. Even the types of vehicles Americans have access to is being manipulated by presidential overreach.
Most recently, Democrats announced a plan that would allow the IRS to more closely monitor any deposit or withdrawal over $600 that you make from your bank account. That means, a new set of tires, a new fridge, even a generous gift from your grandmother could be reported to the federal government.
Among Americans, resistance to such a plan is resounding and bipartisan with two-thirds of voters opposing the proposal according to a new survey from the Independent Community Bankers of America. Nonetheless, Democrats are moving forward. Why? Because they’re struggling to find a way to pay for a $3.5 trillion spending spree that funds amnesty, new entitlement programs, and portions of the Green New Deal. As always, they’re turning to Big Brother – rather than reduced spending – for a solution.
The problems with this idea are serious and multifaceted. First and foremost, it’s an unprecedented invasion of privacy. The federal government simply has no businesses monitoring Americans like this.
Second, it is unnecessary. The IRS collects plenty of information already to ensure tax dodgers are found.
Finally, the proposal would hurt small businesses already struggling to recover from government-mandated shutdowns and federal policies that discouraged work. For many small businesses, the risk of double-counting income would increase significantly. Additionally, their access to loans could be affected, as the regulatory costs of this scheme could gravely impact community banks and potentially put some out of business. Without these local banks which distribute about half of small business loans, many job creators will have difficulties accessing the capital they need to expand or hire.
For these reasons, I will be fighting tirelessly against the implementation of this proposal. Under our Constitution, the federal government is responsible for facilitating commerce and providing for the national defense – and not much beyond that. Most certainly, the Founding Fathers, who fought for independence from an overreaching regime, did not hand future politicians the authority to monitor every withdrawal or deposit from your personal bank account.”
Gordon Fellows, President of the Mississippi Banking Association joined SuperTalk recently to share his thoughts on the proposal.