In response to pressure from the Republican Party and the banking industry, Democrats have decided to scale back their original plan to have all bank transactions over $600 to be reported to the IRS. Instead, the cap has been raised to $10,000.
The revised plan was announced by Senator Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, and Elizabeth Warren (D-Mass.).
“Today’s new proposal reflects the Administration’s strong belief that we should zero in on those at the top of the income scale who don’t pay the taxes they owe, while protecting American workers by setting the bank account threshold at $10,000 and providing an exemption for wage earners like teachers and firefighters,” Treasury Secretary Janet Yellen said in a statement.
Republicans, however, still aren’t behind this blatant invasion of privacy.
“If they raise it to $10,000, it will still capture everybody and every small business,” Senator Pat Toomey (R-Penn.) ranking member of the Banking Committee said in a press conference prior to the announced change. “What will happen if they actually implement this? Americans will lose their privacy, private information is going to be provided about them — the IRS won’t know what to do with it, they’ll just get flooded with a massive, massive number of individual and small business accounts.”
“Marx is on our doorstep right now,” Senator Kevin Cramer (R-ND) said. “It shouldn’t surprise us that [Democrats] have got the boldness to do this.”
The Biden administration dismissed concerns from Republicans that the revised cap would still subject a large segment of the population to IRS surveillance, and insists the purpose of the plan is to detect high-income tax evasion.
The banking industry isn’t happy with the new plan either.
“Even with the modifications announced today, this proposal still goes too far by forcing financial institutions to share with the IRS private financial data from millions of customers not suspected of cheating on their taxes,” said Rob Nichols, president and CEO of the American Bankers Association.