Democrats are still trying to work out a deal on President Biden’s massive social spending and climate change plan, including new ways to raise taxes and to find those who haven’t paid their taxes.
One controversial idea is the Democratic plan for financial institutions to give the Internal Revenue Service (IRS) information about the bank accounts of millions of Americans and businesses.
During an interview with Bloomberg Television at the Economic Club of Washington, Sen. Joe Manchin (D-WV) said he told Biden during a recent meeting, “Do you understand how messed up that is? This cannot happen. It’s screwed up.”
“I think that one is going to be gone,” he added.
Manchin was referring to the proposal by Sens. Elizabeth Warren (D-MA) and Ron Wyden (D-OR) where banks would provide information of customers with annual deposits or withdrawals worth more than $10,000.
Democrats originally proposed any transactions over $600 but revised it last week after the idea received major backlash from financial institutions and Republicans.
Treasury Secretary Janet Yellen has endorsed the controversial idea, claiming it would make it harder for wealthy individuals to hide sources of income to avoid being taxed by the government.
“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 Treasury secretary claimed on CBS earlier this month, “We have a tax gap over the next decade is estimated at $7 trillion, mainly a shortfall in the amount the IRS is collecting due to a failure of individuals to report the income that they have earned.”
During a recent appearance on CBN News’ Faith Nation, the Cato Institute‘s Norbert Michel said the IRS knows exactly who’s been cheating on their taxes.
“The truth is if you know that it’s billionaires that are cheating on your taxes, well, you know exactly who those people are,” he added. “There aren’t that many billionaires in the U.S. or anywhere relative to everybody else. So it’s very easy to go after exactly who you say is not paying their taxes.”
“What she’s (Yellen) saying is nonsense,” Michel told CBN News. “It doesn’t add up. You’re literally going to have the IRS take a giant data file from all of these different banks. This is very much like the anti-money laundering reports. As it is, banks file millions and millions of reports every year on multiple transactions, even for people who have done absolutely nothing wrong.”
“The IRS has everybody’s income information,” he noted.”They know who makes a billion dollars a year. They know who the wealthiest individuals are in the nation. If those people are in fact cheating on their taxes, well there’s a process for dealing with that and this is not necessary.”
Critics argue giving the IRS access to bank account information is an invasion of privacy.
“No one should be in anyone’s bank account,” Manchin told a group of reporters Tuesday.
Bloomberg reports House leaders say they could vote on a bill as soon as this week, however, that is increasingly unlikely as lawmakers continue debating the bill’s details.
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