Posted on 10/19/2021 1:04:06 PM PDT by Red Badger
Secretary of the Treasury Janet Yellen has relented in response to backlash over a controversial proposal by Democrats that would have allowed the IRS to gain information from any American bank account with more than $600 of activity in a year.
The measure initially came to light as a part of Democrats’ $3.5 trillion reconciliation bill. Trying to head off concerns from moderates, Democratic leaders and rank-and-file lawmakers have desperately marketed the bill as being completely paid for with no substantial effect on the deficit or national debt.
One proposal to achieve that end was the IRS measure. Despite immediate backlash, Speaker of the House Nancy Pelosi (D-Calif.) and Yellen adamantly defended the planned IRS overhaul.
Yellen, the former Chairwoman of the Federal Reserve who took control of the Treasury in January, said the measure is designed to target wealthy Americans who hide income from the IRS. Because of the measure, Yellen said the IRS will be able to collect more taxes from the wealthy and close the “tax gap.”
“We have a tax gap that over the next decade is estimated at $7 trillion, namely a shortfall in the amount that IRS is collecting due to a failure of individuals to report the income that they have earned,” Yellen said.
Now, Yellen has somewhat changed course, supporting a raise in the reporting threshold from $600 to $10,000.
While still supporting the broad goal of closing the so-called “tax gap,” she relented on key aspects of the program.
“Under the current system, American workers pay virtually all their tax bills while many top earners avoid paying billions in the taxes they owe by exploiting the system,” she said. “At the core of the problem is a discrepancy in the ways types of income are reported to the IRS: opaque income sources frequently avoid scrutiny while wages and federal benefits are typically subject to nearly full compliance.”
“This two-tiered tax system is unfair and deprives the country of resources to fund core priorities.”
However, responding to concerns that the program would target middle class and low-income Americans, Yellen announced several changes to the original measure.
Foremost, the reporting threshold will be raised to $10,000, addressing a key concern from critics who considered $600 to be too low to merit IRS snooping.
Yellen also announced an “exemption” from the measure “for wage earners like teachers and firefighters.” It is not yet clear whether this exemption will extend to other middle class wage earners in the private sector.
Yellen applauded these new proposals for “protecting American workers.”
“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,” Yellen said.
She concluded, “We will e 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.”
Republicans have criticized the proposal since it became public.
House Minority Leader Kevin McCarthy (R-Calif.) said, “This surveillance program crosses a line,” calling the program “un-American.”
Senate Minority Leader Mitch McConnell (R-Ky.) said that Democrats “want to finance their spending spree by effectively treating every ordinary American as if they were under IRS audit.”
“I must have forgotten when the president campaigned on giving everybody their own audit,” McConnell quipped.
Sen. Tommy Tuberville (R-Ala.) decried the plan in a statement as “[violating] the liberty of every freedom-loving American who values their financial privacy.”
For a huge part of the public, the only thing hitting the bank account is the slim pickings of a paycheck AFTER TAXES have been already paid.
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If you make $15/hour, and you didn’t have anything withheld, your paycheck for a 40 hour week would be exactly $600
This doesn’t seem like a coincidence to me, considering that’s what liberals wanted for a long time to bump the minimum wage up to.
I think it’s more salary people, but even many hourly people get paid bi-weekly or twice monthly. That means even someone making $10/hour and all the payroll withholding will still go over the $600 threshold.
HOWEVER... If you are not a documented citizen, and you can find work under the table, you’re probably getting cash and you’re getting each day, or once a week or less. Since you’re getting cash, it’s unlikely you’ll be depositing a whole week’s pay.
Seems to me they don’t want the IRS to find all of the illicit under the table labor with this threshold.
Exactly. It’s 10k/year. Not the standard 10k/transaction.
It Seems like an illegal search to me.
I think by "wealthy" the Dems mean anyone who has a few dollars cash in their pockets or accounts...except for themselves, of course.
Its going to be $10,000.00 TRANSACTION NOW! STILL SNOOPING!!
Nice, but they will just go ahead and do it and deny it. Like they always do.
“Under the current system, American workers pay virtually all their tax bills while many top earners avoid paying billions in the taxes they owe by exploiting the system,” she said.”
Soooo.... if that’s the case then why do you and your commie ilk want to spy on the little peoples measly ol’ rinky-dink bank accounts?
All these new laws or programs should MANDATE that the first 3 years they are tested by using ALL Federal elected and unelected employees as the test group. Yellin and Pelosi can test the $600 rule on themselves before unleasing it upon the entire country.
Look you idiot RINO, that line was crossed when Bush passed the Patriot Act firing the gun that started the race to deprecate civil liberties. They they just kept going.
No. Not $10,000 or $100,000.
There are not tons of tax cheats. There are tons of corrupt bureaucrats.
Get a warrant.
That was single transactions of $10,000 or more.
They want a $10,000 reporting threshold for the TOTAL of ALL transactions on an account for a full calendar year, if you pay JUST your rent or mortgage of $833.34 a month from the same account, they want full access to EVERY SINGLE TRANSACTION you made that year.
You used your debit cart at Taco Bell? They want to know.
So how do W-2 wage earners confirm the IRS is not doing this???
A victory...but we have to keep our eyes on them, because they want this and they’ll try to get it some other way.
There might be “more to come,” but maybe not a whole lot more. You can only tick off and gaslight someone so much before they get the idea that everything you say is a threat or a lie. I think the American public — including a whole lot of Democrats — is finally getting sick of being played.
They are regrouping or flanking.
Don’t let your guard down.
Stand By to Stand by..
“10k is still non of her business.”
Agreed. How does the 10k compare to the cost of one those electric cars her crowd is pushing on us?
H/t Robert a. Cook, PE
Pelosi’s $600.00 IRS tattletale snooper trap was in ObamaCare......revoked by republicans the next year.
No publicity though!
“SOMEBODY “ big and important....but hidden....really wants the IRS’ muscular law enforcement authority over struggling taxpayers.
Since it’s Biden wanting to let IRS SNOOP at bank accounts....sounds like he’s got a nose for the smell of dollars as well as hair.
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