Never let a crisis go to waste. For years, this has been the model used by power-hungry governments to restrain liberty and limit individual rights. In the midst of the COVID pandemic, the Biden Administration is hoping that the public will be too consumed by dealing with battles over health and safety issues to notice one of the largest, and most intrusive, power grabs in recent memory.
As part of its efforts to “find” funds for his most recent multi-trillion dollar government expenditure package, President Biden and his allies, namely Senator Elizabeth Warren, are trying to force financial institutions to report on all withdrawals and deposits by individuals. A provision in the American Families Plan proposed by the President requires your personal bank or credit union, or even platforms like Venmo, Paypal, or Facebook, to send a report to the IRS every year with detailed information on how and where you receive and spend your money. The security concerns alone with the wholesale sharing of customers’ financial information to comply with this legislation should be enough to sound the alarms.
As usual, these progressive forces dress up their proposal as being aimed at the “wealthy” and at stopping “tax cheats.” The President’s own website says that the plan will “revitalize enforcement to make the wealthy pay what they owe.” These claims seek to disguise the enhanced scrutiny on every American’s financial status.
If the administration was truly concerned with only the wealthiest taxpayers, the plan would require reporting only on accounts with more than, for example, $250,000 worth of transactions. Instead, they have set the floor at $600. This means that if your daughter has a lemonade stand that makes $601 in a year, her income is going to be reported to the tax man. This is hardly the “wealthy tax cheat” that Sen. Warren claims to be targeting.
This proposal will also unfairly target individuals living in non-traditional or multi-generational households. If your young teenage child has a part-time job, or receives checks or monetary gifts that go into your account, be prepared for the IRS to come knocking to ask you why you didn’t report that on your taxes. If an individual doesn’t have a bank account, but uses an account in their parent or spouse’s name to deposit their paycheck, get ready for questions from Uncle Sam about your financial dealings.
Finally, like so many “progressive” policies, this will unduly harm racial and ethnic minority groups. According to Forbes, 22% of American adults are unbanked or underbanked, and 6% have no bank account at all. Instead, they rely on a combination of check cashing services, money orders or other alternative financial services. Federal data indicates that racial and ethnic minorities are much more likely to be unbanked or underbanked; these groups often were historically shut out of traditional services, and have reported high levels of distrust in financial institutions. Instead of working to fix these systemic problems, the Biden Administration and its progressive congressional allies are creating fear and disincentives to opening financial accounts. This will continue to exacerbate the financial difficulties experienced in traditionally marginalized communities.
Make no mistake: the wealthiest 1% of taxpayers will come armed with accountants and lawyers to help them arrange their finances to avoid excess taxation. Single parent families, individuals with part-time Etsy shops, and young families simply don’t have the time or resources to fight the federal government. This new IRS rule will overwhelmingly target and harass middle class, minority, and multi-generational households. No one should be lured in by the promise of additional federal giveaways in the President’s plan—all Americans should be united in opposition to this dangerous and intrusive grant of power to the IRS.
Treasurer Allison Ball is the 38th State Treasurer for the Commonwealth of Kentucky. Treasurer Ball is currently serving her second term.
