Democrats on the Ways and Means Committee have drafted a proposal that would hit the American public with an additional $2.9 trillion over 10 years in tax revenue. Here are some of the increases sought by the massive proposal:
Increase the top individual rate to 39.6%. This marginal rate applies to married individuals filing jointly with taxable income over $450,000, to heads of households with taxable income over $425,000, to unmarried individuals with taxable income over $400,000.
Increase the top corporate tax rate to 26.5%. Increase the top capital gains rate from 20% to 25%.
Expand the net investment income tax to cover net income derived in the ordinary course of a trade or business for taxpayers with greater than $400,000 in taxable income (single filer) or $500,000 (joint filer).
Increase the holding period for which a taxpayer must qualify for capital gains treatment from 3 to 5 years.
Increase the rate of tax on tobacco products.
Reduce the deduction on Foreign-Derived Intangible Income from 37.5% to 21.875%.
Provide $80 billion over the next ten years for IRS funding for tax enforcement related to high income taxpayers.
The Daily Wire reported on Friday:
President Biden and the Democrats’ $3.5 trillion budget plan means to monitor gross inflows and outflows from Americans’ bank accounts, prompting concern that the federal government would be willfully violating the 4th Amendment.
“The proposal would require banks to report to gross inflows and outflows to the IRS, including transactions from Venmo, PayPal, crypto exchanges and the like in an effort to fight tax evasion,” the Daily Mail noted, adding, “The IRS would know how much money is in an individual’s bank account in a given year, whether the individual earned income on that account and exactly how much was going in an and out.”
Patrick Hedger, vice president of policy at the Taxpayers’ Protection Alliance, blasted the idea, saying, “The IRS is first and foremost, a law enforcement agency and the Fourth Amendment protects against unreasonable searches and seizures in pursuit of, of looking for wrongdoing and criminal actions, so I think this is going to run into severe Fourth Amendment headwinds.”
He added:
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 that are eligible for taxation offshore. This is the ultimate regressive tax. You’re going to end up punishing the worst off among us … the lower income folks in this country have historically been the targets of aggressive IRS audits because they don’t have the CPAs and the lawyers to be able to fight back. I don’t see why they need to be going after people, you know, just the average, the average Joe and start stooping on, you know, a $600 payment. It doesn’t make any sense, these, this is, I mean this is beyond trying to pick out low hanging fruit.