Politics Democrats to raise cap on Biden’s IRS transaction data proposal
Democrats may torpedo their big plan: Shielding billionaire wealth, making it tougher to get aid
Corporate lobbyists fight back — and it looks like Rep. Richie Neal and Sen. Joe Manchin are doing their bidding Bernie Sanders and Joe Manchin Photo illustration by Salon/Getty Images
Democrats plan to revise President Joe Biden’s proposal that all bank transactions of more than $600 be reported to the IRS as banks and privacy advocates come out against the plan.
The initial proposal was for banks to report all account inflows and outflows of over $600 to the IRA in an effort to crack down on tax cheats and raise revenue for Democrats’ multitrillion-dollar infrastructure and social spending package. Now, House Ways and Means Chairman Richard Neal says Democratsto raise that threshold.
“We’ve reached an agreement to not have the $600,” Neal said Thursday, according to Bloomberg.
Biden looks to recapture his political momentum with a full-court press on his domestic agenda
A politically weakened President Joe Biden is looking to spark a turnaround with a renewed focus on his domestic agenda after a month marred by a spike in Covid-19 cases and a messy withdrawal from Afghanistan. © Evan Vucci/AP President Joe Biden delivers remarks on the economy in the East Room of the White House, Thursday, Sept. 16, 2021, in Washington, DC. Officials tell CNN the President is now determined to recalibrate around his massive economic proposals: a $3.5 trillion budget bill and $1.2 trillion bipartisan infrastructure bill. He hopes to recapture momentum lost over a calamitous August.
While Democrats are still working to work out the details, they are reportedly targeting a $10,000 threshold. That is similar to the amount the federal government already monitors through the Treasury Department.
Banks are currently mandated to file currency transaction reports on all deposits of over $10,000 to the Financial Crimes Enforcement Network, a division of the Treasury Department. The FinCEN prevents money laundering and crime but doesn’t monitor the reports for tax purposes.
However, banks and credit unions fear the Biden proposal to report all transactions over $600 to the IRS would be overly burdensome, taking up crucial time and money.
Democrats tackling flash points of taxes, health, climate
WASHINGTON (AP) — Revamp the tax code and important federal health care and environment programs. Spend $3.5 trillion over 10 years, but maybe a lot less. Ensure that no more than three Democrats in all of Congress vote “no” because Republicans will be unanimously opposed. Try to finish within the next couple of weeks. And oh yes: Failure means President Joe Biden's own party will have repudiated him on the cornerstone of his domestic agenda. That's what congressional Democrats face as they try writing a final version of a massive bill bolstering the social safety net and strengthening efforts to tame climate change.
“From a bank perspective, the administrative challenges and complexities of having a $600 annual threshold may not achieve the policy goals of reducing tax avoidance,”, senior vice president of government relations at the Electronic Transactions Association. “At $600, the squeeze may not be worth the juice.”
There are also privacy concerns, particularly given that a threshold as low as the proposed $600 would target nearly everyone. More than 140 Republican lawmakers sent letters to Neal, House Speaker Nancy Pelosi, Treasury Secretary Janet Yellen, and IRS Commissioner Charles Rettig pushing back on the notion.
“Not only would such an overly comprehensive IRS database require significant resources to build, maintain, and protect, but it would make the personal financial data of millions of Americans vulnerable to attack,” they said in the.
Mind the (tax) gap: To fund new spending, people should pay the taxes they owe
Americans who play by the rules should not be made to carry water for those who don’t.But there is one obvious way to help fund the package that won't raise anyone's taxes, won't shrink any spending programs and has an at least 40-year history of bipartisan support. It's called closing the tax gap.
Part of Democrats’ plan to fund their spending package is to infuse the IRS with billions of dollars to increase tax enforcement and work to close the massive tax gap in the country, which is the aggregate amount of taxes owed versus what is actually collected.
Republicans have balked at giving the IRS more power and funding, particularly in light of theearlier this year when thousands of pages of classified tax documents tied to the country’s wealthiest people were released to the media. Despite an investigation, nobody has been charged for the massive leak.
Biden’s $600 threshold proposal was anticipated to raise nearly $500 billion in revenue over the next decade, although it’s unclear what the revenue prospects of the revised proposal is expected to net.
Democrats are threading the needle with the spending package, which will be passed through a budgetary reconciliation process that avoids a Republican filibuster and only needs a simple majority vote to pass. Democrats can’t afford to lose a single vote in the Senate and can only do without a few votes in the House, meaning centrists in the party have outsize power in the negotiations.
Why Are There So Many Democrats to Joe Biden’s Right?
Political necessity doesn’t explain moderate opposition to the $3.5 trillion Build Back Better Act.During his 36 years in the Senate, Biden was a walking, talking weather vane. Wherever political winds blew, he followed. He was for school integration before his constituents were against it. He was skeptical of “tough on crime” politics before the electorate clamored for it. You might let your conscience be your guide; Biden stuck with the median voter.
Other measures Biden has proposed have already been pared down from their initial levels. Biden’s 28%now sits at 26.5%, and a plan to nearly double the capital gains rate for the highest earners also .
Washington Examiner Videos
Tags:, , , , ,
Making ‘SALT’ relief pay for itself among Democrats’ options .
With the price tag of their sweeping budget reconciliation package seemingly dwindling, Democrats pushing an expensive plan to lift a cap on state and local tax deductions may find themselves in the uncomfortable position of needing to pay for that relief by keeping some limit in place for years to come. The $10,000 cap on state and local […] The post Making ‘SALT’ relief pay for itself among Democrats’ options appeared first on Roll Call.