In response to the added powers for the Internal Revenue Services proposed in the extensive budget reconciliation bill, the state of Nebraska says that it will not comply.
"My message is really simple. The people of Nebraska entrusted me to protect the privacy of these accounts and I am not going to comply with this. If the Biden administration sues me, we will take it all the way to the Supreme Court. We are going to fight every step of the way," State Treasurer John Murante told Fox Business.
The proposed additions to the IRS, which lies on page 2,283 of nearly 2,500, would allow the IRS to force banks to report inbound and outbound transactions of $600 or more in American's bank accounts.
According to Fox Business, "The White House has estimated the policy, which would apply to bank, loan and investment accounts, could generate about $463 billion in additional revenue over the next decade."
The bill sets aside nearly $79 billion "for necessary expenses for the Internal Revenue Service for strengthening tax enforcement activities and increasing voluntary compliance, expanding audits and other enforcement activities, and modernizing information technology to effectively support enforcement activities, except that no use of these funds is intended to increase taxes on any taxpayer with taxable income below $400,000."
Murante believes that other state treasurers will follow his lead in opposing the proposal, saying "we have members across the country who are committed to limited government and free market approaches, and we are unanimously against this proposal. It is an invasion of privacy and lacks any due process."
The proposal is already being met with opposition from prominent banking groups. On Wednesday, FirstBank CEO Jim Reuter told the House Financial Services subcommittee that the proposal "is yet another regulatory burden that would only lead to further consolidation in the industry," according to the American Bankers Association Journal.
"Administratively, the cost would be significant," said Reuter. "We don't track [the data]in the manner that’s being contemplated here. We might look for anomalous activity or fraud but we aren’t tracking it in a way that meets what the IRS is looking for."
"While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population," the associations wrote.
"In addition to the significant privacy concerns, it would create tremendous liability for all affected parties by requiring the collection of financial information for nearly every American without proper explanation of how the IRS will store, protect, and use this enormous trove of personal financial information. We believe that this program is costly for all parties, not fit for purpose, and loaded with potential for unintended and serious negative consequences," the letter continued.
Consumers Bankers President Richard Hunt told Fox Business that the data could potentially be used against individual and business customers.
"Now that they have the data, they are going to slice and dice and look into every single transaction of nearly every American," said Hunt during an interview on Fox Business' Mornings With Maria, adding, "I'm afraid if it does pass it may force some people not to get into the banking system, and we need people in the banking system."
Despite significant pushback from individuals and groups, Treasury Secretary Janet Yellen continues to defend the proposed additional powers for the IRS. In her testimony earlier this week on Capitol Hill, Yellen defended the purpose of the bill while being pressed by Senator Cynthia Lummis of Wyoming.
"I think it's important to recognize that we have a tax gap that's estimated at $7 trillion over the next decade," Yellen said. "That is taxes that are due and are not being paid to the government that deprive us of the resources that we need to do critical investments to make America more productive and competitive."
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