WASHINGTON D.C. – Free college, child care, and all the spending that has been taking place in Washington D.C. has to be paid for somehow. It is not free money. The Biden administration has proposed strengthening its coffers by bolstering the IRS to go after every penny that they can.
The Biden administration has proposed requiring financial institutions to report to the IRS all transactions of all business and personal accounts worth more than $600, including withdrawals and deposits, instead of relying on the taxpayers themselves.
The most recent development, wrapped in fancy trappings, is the American Families Plan.
According to the Treasury, “President Biden recently proposed the American Families Plan, advancing comprehensive and necessary investments in American children and families. To help support this important agenda and increase fairness in the tax system, the President also proposed a set of tax compliance measures to foster a tax system where Americans pay the taxes they owe.”
“The President’s proposal would change the game—by making sure the wealthiest Americans play by the same set of rules as all other Americans. It would require financial institutions to report information on account flows so that earnings from investments and business activity are subject to reporting more like wages already are,” The proposal states.
In order to achieve this, the President’s proposed tax compliance initiatives seek to close the “tax gap”—the difference between taxes owed to the government and actually paid.
According to Treasury analysis, the tax gap totaled nearly $600 billion in 2019 and will rise to about $7 trillion over the course of the next decade if left unaddressed—roughly equal to 15% of taxes owed.
These unpaid taxes come at a cost to American households and compliant taxpayers as policymakers choose rising deficits, lower spending on necessary priorities, or further tax increases to compensate for the lost revenue.
On Wednesday, the Independent Community Bankers of American announced that two-thirds of voters (67%) oppose a proposal that would allow the IRS to collect bank account deposit and withdrawal information from American consumers, the Independent Community Bankers of America (ICBA) announced.