The Biden administration is partially scaling back its intention to monitor Americans’ overall bank account transactions.
The Democrats’ pending $3.5 trillion social spending bill originally contained a proposal that would have compelled banks to report gross inflows and outflows in accounts with balances above $600 at any time during the year. After many lawmakers raised concerns over potential violation of the Fourth Amendment — which prohibits unreasonable searches and seizures — Treasury Secretary Janet Yellen announced on Tuesday that the minimum balance would be raised from $600 to $10,000:
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. We will continue to work with leaders in Congress to enact this important measure to level the playing field for workers and small businesses, and raise revenue to build our economy back better.
However, another fact sheet released on Tuesday by the agency doubled down on its desire to track wealthy Americans’ transactions:
The only way to ensure that upper-income taxpayers pay what they owe is by giving the IRS the resources and information required to close the tax gap. The Administration’s compliance proposals will do just this by providing a bit of additional information and making transformative investments in the IRS, such as hiring enforcement agents who are trained to pursue tax evasion by sophisticated, upper-income taxpayers.
When the Biden administration initially unveiled its plan, Taxpayers’ Protection Alliance vice president of policy Patrick Hedger blasted the idea: “You’re going to push more folks into small cash transactions, you’re going to push more banking offshore… the big fish out there that do have sizable assets that are eligible for taxation offshore. This is the ultimate regressive tax.”
In a recent opinion piece for The Daily Wire, blogger and radio host Erick Erickson likened the proposal to financial “stop-and-frisk.”
“Members of Congress, the president and the Internal Revenue Service are increasingly concerned that you are now committing tax fraud against the federal government, and they want your banks to throw you against the wall and frisk you,” he explained. “A lot of Americans deal in cash or with apps that digitally transfer funds between people. They then deposit the funds into bank accounts. From hairdressers to housekeepers and from drivers to plumbers, everyone is now a suspected tax cheat.”