Bank on it
Notes on a proposal
ARKANSAS types have weighed in on the proposal to give the IRS a lot more information on Americans. And by Arkansas types, we don’t only mean the politicians. Those who would be most affected by the Biden administration’s proposal—that is, bankers—have also been heard from.
The pros and cons have been booted around these pages in the last two weeks. Yet we still have some questions about the whole idea:
■ If banks are going to give the Infernal Revenue Service information on all bank accounts that transact more than $600 a year, how does that “target rich tax cheats”? Or drug dealers trying to launder money? We know a couple of kids working at Sonic after school who’d meet that threshold.
■ The paper said that the new regulation “would help find delinquent taxpayers and could add up to $7 trillion to the U.S. treasury.” Seven trillion! That’s a lot of tax cheating. The general consensus is that taxing all the wealthy people in this country wouldn’t cover what the administration wants to spend in the next decade. So it will have to dip well into the middle class to get the kind of money it wants. Getting $7 trillion more by making banks report on $600 accounts would be a good start, no?
■ How much will it cost banks, credit unions and other financial institutions to monitor and report all those accounts to the IRS? And whatever the cost, surely it will be passed on to their customers.
■ Can the IRS even handle the information? Better said, can the IRS handle the information on all those American bank accounts without that information being hacked or leaked? The IRS has been weaponized before. And hackers target it every day.
■ Speaking of costs, how much bigger will the IRS get? How many more government workers will it have to put on?
Most Americans know that everybody should pay taxes due. And those of us who play by the rules certainly don’t want others to skate. But making the government bigger doesn’t seem the best way to gather taxes more efficiently.
There are too many questions about this proposal. And not enough answers. Let’s not.