Ready for the government to control how you spend your money?

Buried in Joe Biden's spending bill of $3.5 trillion is a provision requiring financial institutions to report to the IRS account transactions (deposits or withdrawals) on accounts totaling more than $600.  Not only will the IRS be tasked with monitoring your bank account, but every time you swipe your debit card or write a check for more than $600, the IRS will be notified.  Last week, Treasury secretary Janet Yellen not only confirmed the proposal during a Financial Services Committee hearing but adamantly supports the snooping.  In truth, the proposal is an enormous government data-grab, the measure will add significant regulatory burdens for banks and credit unions, and it's a blatant attempt to control how you spend your money.

Setting aside the invasion of privacy for a minute, tracking all transactions over $600 will be problematic for the IRS, a government agency not known for competence and efficiency.  One need not look any farther than the recent disbursement of billions of dollars of pandemic stimulus money, plagued by accounting and mailing errors, which ranged from stimulus checks sent to people who weren't eligible, contrasted with people who are eligible and are still waiting for their checks.  In fact, the provision will fundamentally change the information financial institutions are required to report to the IRS and force banks and credit unions to provide the government with information that does not reflect taxable activity. 

The goal is to capture additional taxable income, which the White House estimates to be in the neighborhood of $463 billion over the next decade.  There is no evidence that confirms the estimate; it's simply a contrived war on bank, loan, and investment income that the White House claims is unreported.  The claim is dubious, insofar as banks and investment firms are required by law to file the 1099-INT form on all accounts.  The only people guilty of unreported income are those people not filing income tax returns expressly for the purpose of tax evasion.  More importantly, the cost for financial institutions to comply is staggering, requiring banks to update software, train additional staff, and manage the burdensome regulations.  All of this will come at a cost, passed down to the consumer. And there's always the threat of security breaches.

The absurdity of monitoring bank accounts and reporting transactions over $600 can't be emphasized enough. During the Financial Service Committee hearing, Wyoming congresswomen Cynthia Lummis pressed Secretary Yellen on the necessity of the reporting requirement stating, "Are you aware of how unnecessary this regulatory burden is," adding,  "Do you distrust the American people so much that you need to know when they bought a couch?  Or a cow?"  Lummis has since co-sponsored Senator Mike Crapo (R-Idaho)'s amendment to prevent financial institutions from monitoring and reporting sensitive American taxpayer information to the Internal Revenue Service.

The last time Democrats attempted to pass a massive legislative behemoth, Nancy Pelosi remarked, "We need to pass the bill so that you can find out what is in it."  Not this time, Madame Speaker.  Not this time!

Image: PublicDomainPictures via Pixabay, Pixabay License.

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