Politics Democrats' bank-spying proposal is not about wealthy tax cheats — it's about you

08:00  26 october  2021
08:00  26 october  2021 Source:   washingtonexaminer.com

Democrats face growing storm over IRS reporting provision

  Democrats face growing storm over IRS reporting provision Democrats are facing a firestorm of criticism over a proposal to increase the amount of bank account information reported to the IRS, posing a challenge as they craft their wide-ranging social spending bill.The proposal is a top priority of the Biden administration, which argues it will help the IRS go after wealthy tax cheats. But it has come under a barrage of attacks from banks and Republicans, who say it raises significant privacy concerns. Financial institutions have been mobilizing their customers to speak out against the proposal to lawmakers.

It wants to look at everyone’ s bank account so its agents have another excuse to audit and squeeze more From @WSJopinion: Democrats walked into a political ditch with their plan to let the Internal Revenue And this is not a proposal to provide detailed transaction-level data by banks to the IRS.”

Bowing to pressure from banks and taxpayers concerned about a proposal to require financial institutions to report to the IRS gross inflows and outflows for just about every account in the country, Democrats have attempted to quell concerns by raising the threshold. Unfortunately, even the raised threshold is still laughably low to accomplish Democrats ’ stated purpose of cracking down on wealthy tax cheats . The original proposal would have required financial institutions to report on any account (be it a checking account, savings account, stock portfolio, etc.) which handled more than 0 in

This weekend, Binyamin Appelbaum argued in the New York Times that Republicans, in opposing the Democrats' proposal to monitor bank accounts with certain minimum transactions, are abetting tax evasion.

a book sitting on top of a table © Provided by Washington Examiner

The IRS, he notes, has recently estimated that nearly half of all income not reported independently on W-2 or 1099 forms goes unreported. Therefore, give the government access to your banking habits, or else you're a criminal. In logic, this is known as the "false choice" fallacy, and it is one of several that he commits in this piece.

Appelbaum writes:

Resistance to taxation is the rotten core of the modern Republican Party. Republicans in recent decades have sharply reduced the federal income tax rates imposed on wealthy people and big companies, but their opposition to taxation goes beyond that. They are aiding and abetting tax evasion.

Expanded child tax credit contains almost no tax cuts

  Expanded child tax credit contains almost no tax cuts Democrats’ rhetoric about their expansions of the child tax credit increasingly insists that these new benefits amount to “tax cuts” for middle-class families. As one article recently put it: “In speeches, internal memos, and campaign-style videos, President Joe Biden and the Democrats are increasingly promoting the payments as a ‘tax cut’ for the middle class, rather than a spending program that benefits only lower-income families.” But that characterization is sharply at odds with the proposal’s actual effects, which Democrats would extend for four years as part of their $3.5 trillion budget reconciliation package.

You really think wealthy democrats don’t abuse these same loop holes? It ’ s not a party issue it ’ s a class issue. The article is about unemployment fraud, not those receiving unemployment legitimately. People who defrauded the government, and literally stole money they were not entitled to from public funds should be punished. Also, considering we're talking about fraud, it ' s likely that most of them aren't unemployed that's generally what makes it a fraud.

Senate Democrats are eyeing a tax on billionaires to help fund their social spending package amid pushback on income and corporate tax hikes. It ' s unclear whether the Billionaire Income Tax will make the final cut as it needs backing from nearly every Democratic member of the House and all Democrats in the Senate, and there hasn't been Republican support. The plan also addresses growth for the wealthy 's non-tradeable property like real estate, including a charge for deferred gains upon sale.

Republicans have hacked away at funding for the Internal Revenue Service over the past decade, enfeebling the agency. When the rich and powerful open loopholes in the tax code, Republicans reliably fight to keep the loopholes open. Indeed, they valorize Americans who find ways to pay less, a normalization of antisocial behavior that may be even more damaging than the efforts at bureaucratic sabotage.

The worst part comes later, with the ugly insinuation that advocacy for limited taxation is just a form of cloaked racism — ridiculous, but par for the course nowadays, I guess.

Whatever he thinks of limited government and low-tax ideas, Appelbaum cannot be unfamiliar with the distinction between avoiding paying more in taxes than the law requires and deliberately paying less than it prescribes. Yet he positively embraces the fallacy of equivocation in treating as identical two ideas that are not only different but sometimes even conflicting: on the one hand, the idea that our lives do not exist in order to fund the government; on the other, that even crime can be justified somehow if it deprives the government of funds.

The 20 Favorite Tax Havens of the Very Wealthy

  The 20 Favorite Tax Havens of the Very Wealthy Low taxes, political stability and lax regulations make these countries very attractive for the wealthy.Campaign group Tax Justice Network has compiled a Financial Secrecy Index for global tax havens, scoring each country on offshore financial services and secrecy.

Banks warn that 'Americans from all income levels' will still be snooped on by IRS if Biden raises annual threshold from 0 to ,000. The group of banks and organizations said they were not satisfied with simply raising the threshold from 0 to ,000. 'Whether it ' s 0 or ,000 under this proposal the intimate financial details' of almost every American, said Sen. Bill Cassidy, R-La. 'What possibly could go wrong… President Xi would be proud.' Treasury Sec. Janet Yellen, who Cassidy said came up with the 'squid-brained idea,' has said that it will help the IRS to catch rich tax cheats .

Republicans in the Senate have made it clear that they will not support infrastructure legislation if it includes raising taxes on the wealthy or

First, as to his commentary about loopholes, he blames the wrong party. Republicans do advocate lower taxes, yes, but that's not the same thing. The Trump tax bill of 2017, for example, imposed lower tax rates but with fewer loopholes. That has been the Right's model for tax reform going back at least to Jack Kemp. Chuck Schumer, in attempting to restore loopholes such as the full SALT deduction, is helping prove the point.

And no, advocacy for limited government is not based on what racial group is getting government help — it is based on the idea that government should be limited.

But back to the point: Democrats' original proposal called for monitoring all bank accounts with $600 in annual transactions — a fact that Appelbaum doesn't even bother to mention. Yet this fact shapes the entire debate over the policy's goals. This proposal has nothing to do with the wealthy. This would have literally ensnared everyone with a bank account, even many children. Most people's utility bills are larger than $600 per year. This wasn't just stupid, it was indefensible.

Here's how Democrats want to tax billionaires' capital gains

  Here's how Democrats want to tax billionaires' capital gains Racing to find alternate ways to pay for their massive budget reconciliation package, congressional Democrats are now targeting the wealth of the very richest Americans. © Igor Golovniov/SOPA Images/LightRocket/Getty Images The proposal would tax billionaires on the gain in value of certain assets every year, instead of only at the time of sale, as is currently done. Details remain scarce, as lawmakers try to swiftly cobble together the complicated plan so it can be released in the coming days. It would likely only hit those at the very, very top of the wealth ladder.

It ' s part of a plan to catch people who might be cheating on their taxes and to raise badly needed revenue to help finance the Biden agenda. But Republicans are fighting back hard, calling the move an invasion of privacy, while banks object to the increased monitoring. Despite Republican accusations that the IRS wants to spy on taxpayers, it ' s important to note that banks would not report individual transactions — just an annual total of deposits and withdrawals. Initially, the proposal would have applied to any account with at least 0 in total annual cash flows, but that's now been narrowed in

House Democrats unveiled a sweeping proposal for tax hikes on big corporations and the wealthy to fund President Joe Biden' s .5 trillion rebuilding plan, as Congress speeds ahead to shape the far-reaching package that touches almost all aspects of domestic life. The proposed top tax rate would revert Manchin is not alone, as other centrist lawmakers have raised concerns. Restive Democrats from high- tax , heavily Democratic states like New York, New Jersey and California are pushing for a repeal of the ,000 cap on state and local tax deductions that was imposed by the 2017 Trump law.

And yes, so is the current version, even though it raises the threshold to $10,000 per year. That number, which comes to $833.33 per month, doesn't include paychecks or welfare benefits deposited into accounts, but it does include withdrawals as well as deposits. So it would allow the government to monitor the account of basically every family in America that pays rents or mortgages and utilities — basically, everyone outside the homeless and the otherwise unbanked.

Again, if Democrats' intention were really just to go after wealthy tax cheats, they would surely be looking at accounts with well over $100,000 in annual transactions, not every single person who pays rent in America. Also, who believes that sophisticated tax cheats are so naive as to deposit their unreported income into American banks?

This bank-monitoring provision was never a good faith proposal. In practice, it would be used to bully people. We know this because we all just saw it happen this summer.

I believe that malicious IRS bureaucrats are happy to leak information about private taxpayers, even if it means committing a felony, and I believe it because they probably just did it. The more charitable interpretation, that taxpayer information reached ProPublica because the IRS is totally incompetent at maintaining data privacy, is no more reassuring, but the agency doesn't even deserve that much benefit of the doubt given recent malfeasance by bureaucrats such as Lois Lerner.

Sinema steers Dems into uncharted territory on taxes

  Sinema steers Dems into uncharted territory on taxes Until recently, Sinema didn’t appear to have much interest in the tax issues. She hasn’t explained much of her thinking, rarely speaking with reporters, which has left people guessing about her motivations. “Simply raising tax rates will not in any way address the challenge of tax avoidance or improve economic competitiveness,” her spokesperson said in a statement Friday. She has been “engaged for months in substantive, nuanced policy negotiations and is well-versed in the range of current tax proposals being considered.

If this bank provision goes through, we will start seeing leaks to the media about tax policy critics of the Biden administration (or the future Warren or Buttigieg or Stacey Abrams administrations) about how much money they moved through their bank accounts in a given year. As with the ProPublica reports, which absurdly and ignorantly tried to compare taxes paid to wealth rather than income, the public will be misled into believing that these data actually mean something.

One way or another, this information, like the other tax data the IRS handle, will find its way to the media whenever it is useful. It will be used to bully and embarrass people. And it won't catch any tax cheats.

This is not a conspiracy theory or a slippery slope argument — it is merely a prediction that what has already happened will happen again in the future. IRS behavior is, at this point, one of the strongest arguments for abolishing the income tax in favor of a national retail sales tax or (at the risk of giving conservative readers hives) maybe even a VAT.

Tax reform is a much better idea than this bad faith proposal for government monitoring of nearly all bank accounts. No, the preservation of big government is not worth such intrusions.

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Tags: Opinion, Beltway Confidential, Taxes, Tax Reform, tax fraud, New York Times

Original Author: David Freddoso

Original Location: Democrats' bank-spying proposal is not about wealthy tax cheats — it's about you

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usr: 1
This is interesting!