Trade associations from across the country are shaming President Joe Biden's plan to increase revenue to pay for his trillions in federal spending.
Biden's administration has stated its intention to increase IRS auditing through increased funding and more power. Biden's most recent proposal would require banks and financial institutions to give to the Internal Revenue Service information about bank accounts that have more than $600.
More than 40 trade associations representing entire sectors or industries signed a letter to Nancy Pelosi (D-Calif.) and Kevin McCarthy (R-Calif.), raising alarm about the proposal.
The letter includes support from several banking coalitions and calls for Congress to reject this requirement. It claims that it violates customer privacy, and would create an extremely expensive and complicated reporting requirement for banks.
The letter stated that although the purpose of the vast data collection is to expose tax dodging by wealthy individuals, it is not targeted at that population. It would not only create privacy issues but also create huge liability for all parties affected by the requirement to collect financial information on nearly every American. There is no explanation as to how the IRS will protect and use this vast collection of personal financial information. This program is expensive for all parties, unfit for purpose, and could have serious and unexpected negative consequences.
These groups claim it would target "almost all Americans" and ask if the IRS can keep this information safe from hackers and other bad actors.
"The undersigned associations represent a cross-sectional of financial and business interests and write to oppose a proposal under consideration in the reconciliation package that would create an expansive new tax reporting regime that would directly affect almost every American and small company with an account at financial institutions," the letter stated. This proposal would pose significant operational and reputational problems for financial institutions, increase tax preparation cost for individuals and small businesses, as well as raise serious concerns about financial privacy. We urge our members to reject any attempts to promote this new, ill-advised reporting system.
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Some reports suggest that Democrats want to raise the threshold to $600, but this has not happened yet.
Biden suggested earlier this year that the IRS be given an additional $80 billion for auditing. He said the IRS would more than pay back the funds. The House Democrats have not yet indicated that they will fulfill this request.
The IRS has a 99 percent compliance rate for wages. A fact sheet explains that wage earners are required to report their earnings to the IRS. This fact sheet was provided by the White House to legislators to explain the plan. The super-rich, who have their income from sources that are not reported to the IRS, can hide their income and avoid the tax they owe. The top 1 percent of the population chooses to not pay more than $160 million in taxes each year.
The House Ways and Means Committee Republicans have set up a virtual roundtable Wednesday entitled Weaponization of IRS: A Sordid Historical and the Need to Taxpayer Protections, to discuss these concerns.
According to Kevin Brady, a Texas Republican Rep., the meeting will focus on the efforts of congressional Democrats in nearly doubling the size of IRS through a huge funding increase, but not addressing the weaponization of IRS. This includes the massive criminal leak of taxpayer data to ProPublica in June this year.
The $3.5 trillion bill has been the subject of criticism from the business community in recent days.
This week, the U.S. Chamber of Commerce condemned the bill and called it an existential threat.
The reconciliation bill is actually 100 bills in one, representing all big government ideas that have never been able pass in Congress. Suzanne Clark, U.S. Chamber of Commerce CEO and President Suzanne Clark stated. This bill poses a serious threat to America's fragile economic recovery as well as future prosperity. One bill, which is more than twice as large as the combined budgets from all 50 states, will not provide lasting or practical solutions. The bipartisan infrastructure negotiations have been a success and provide a better example of how Congress should approach America's problems.
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Tags: News. State. IRS. Business.
Original Author: Casey Harper from The Center Square
Original Location: Under the Biden plan, IRS would keep track of all bank transactions exceeding $600; Businesses revolt
