Uncle Sam is hoping to get a closer look at the money owned by the average American: a Biden administration official has proposed the government keep tabs on bank accounts with as little as $600 in transactions, according to a report on Tuesday by the Wall Street Journal, quoted by Fox News.
Internal Revenue Service (IRS) Commissioner Charles Rettig has proposed that banks report annual cash flows even for those with ordinary – not business – bank accounts: specifically those with more than $600 of transactions in a 12-month period, and/or those with more than a $600 balance.
The plan, supported by Treasury Secretary Janet Yellen, has gone to the House Ways and Means Committee, where a debate is taking place on whether to include such a mandate in the proposed $3.5 trillion spending bill – a measure which already includes $80 billion for the IRS to hire thousands of new staffers.
Yellen said in a letter to the committee that the plan will uncover “opaque income streams that disproportionately accrue to the top” – fancy language for saying she wants to target wealthy tax dodgers.
A coalition of 41 industry groups has warned Congressional leaders that this plan is “not remotely targeted” to detect big tax dodgers. And the Wall Street Journal editorial board warns that such a measure would also constitute “a privacy breach waiting to happen… Adding bank account info to the IRS trove would risk the disclosure of savings and spending information of political adversaries.”
A sum of $600 in one’s bank account is hardly a red-flag item in today’s America. And one can rack up $600 in transactions simply by paying one’s heating bills, let alone the rent.
Nebraska State Treasurer told WSJ that his state will not comply with such a mandate, if the measure is passed.
The bigger threat of giving the IRS access to the details of one’s bank account, says WSJ – which condemns the idea — is that “politicians will eventually find a way to control how you save and spend your own money.”
If they don’t simply find a way to take it first.