Democrats under pressure from the GOP and the banking industry have agreed to raise the cap to $10,000 on a proposal that all bank transactions of more than $600 be reported to the IRS.
Sens. Ron Wyden of Oregon, who heads the Finance Committee, and Elizabeth Warren of Massachusetts are set to lead the party in announcing the change on Tuesday afternoon, just hours after the proposal was endorsed by Treasury Secretary Janet Yellen.
“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, while protecting American workers by setting the bank account threshold at $10,000 and providing an exemption for wage earners like teachers and firefighters,” Yellen said in a statement.
The initial iteration of the proposal required banks to report all account inflows and outflows of over $600 to the Internal Revenue Service as a way of cracking down on tax fraud and bringing in revenue for Democrats’ multitrillion-dollar infrastructure and social spending package.
Republicans objected to the notion and said that the idea was logistically burdensome, would be too intrusive, and would not target the wealthy as intended, but rather, would go after most people in the country, given the low threshold.
A group of GOP senators addressed the revised proposal preemptively during a noon press conference on Tuesday. They said that even with the cap raised to $10,000, the plan would still hit the average person.
“If they raise it to $10,000, it will still capture everybody and every small business,” said Sen. Pat Toomey of Pennsylvania, ranking member of the Banking Committee. “What will happen if they actually implement this? Americans will lose their privacy, private information is going to be provided about them — the IRS won’t know what to do with it, they’ll just get flooded with a massive, massive number of individual and small business accounts.”
Some of the GOP senators menaced the specter of socialism in their appeal to reject the proposal. John Kennedy of Louisiana said that Chinese ruler Xi Jinping “would be proud” of the “squid-brained” plan.
“Marx is on our doorstep right now,” exclaimed Sen. Kevin Cramer of North Dakota. “It shouldn’t surprise us that [Democrats] have got the boldness to do this.”
Despite complaints from Republicans that the $10,000 proposal would still capture a large chunk of the population, the Treasury Department said that it is intended to detect high-income evasion and asserted that audit rate would not rise relative to past years for those making less than $400,000 annually.
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Original Author: Zachary Halaschak