When even President Joe Biden seems to think a way to raise tax revenue through the IRS is “screwed up,” it’s got to be pretty bad.
And yet, it was supposed to be one of the cornerstone elements of how the Democrats were going to pay for their massive $3.5 trillion spending bill. Purportedly to catch tax cheats who were trying to scuttle away money in various bank accounts to in order to underpay taxes, the bill would require banks to report inflows and outflows of all accounts with a certain amount of activity each year.
The number was originally $600 — something that could affect virtually every American. After an outcry, Democrats raised the limit to $10,000 in aggregate transactions before an account must be reported.
“It would ask just for two pieces of information from the banks of these folks — the amounts that come into their bank accounts and the amounts that go out of their bank accounts,” Biden said, adding it was so people would “pay what they owe, what the existing tax code calls for.”
According to West Virginia Democratic Sen. Joe Manchin — an ardent opponent of the provision and a vote the Democrats will need if the spending bill stands any chance of getting through the Senate — the president appears to be backing away from that position.
“The president and I had this conversation, I said, ‘Mister President, I don’t know who put this out, but that’s screwed up,'” Manchin said about the proposal during a Tuesday interview with David Rubenstein, president of the Economic Club of Washington, D.C., according to ABC News.
“Do you understand how messed up that is?” Manchin said he told Biden. “This cannot happen. It’s screwed up.”
“[Biden] says, ‘I think Joe [Manchin] is right on that,'” Manchin said. “So, I think that one’s going to be gone.”
Manchin also agreed raising the reporting threshold wasn’t going to solve any problems.
“Even if it’s $10,000 that’s only $800, $900 a [month],” Manchin said, according to the Daily Mail.
Manchin would later confirm there was no reporting threshold he would find supportable.
BANK REPORTING : @Sen_JoeManchin clarifies to me he opposed bank reporting no matter what the threshold. “No one should be in anyones bank account “
— Erik Wasson (@elwasson) October 26, 2021
Granted, this is just based on a report about what Biden privately said to Manchin. The problem is that House Speaker Nancy Pelosi, when last we checked, still insisted the reporting requirement was staying in the spending bill, which originated in her House of Representatives.
During a media briefing on Oct. 12, a reporter said “Americans are starting to be worried about this” provision and asked whether “giving the IRS more money to crack down on unpaid taxes is going to stay in the reconciliation bill?”
When Pelosi answered affirmatively, the reporter then asked what the speaker would say to concerned Americans.
“Yes. Well, I mean, with all due respect, the plural of ‘anecdote’ is not ‘data.’ I’ve said that before here,” Pelosi said, according to a transcript.
“Yes, there are concerns that some people have. But if people are breaking the law and not paying their taxes, one way to track them is through the banking measure. I think $600 — but that’s a negotiation that will go on as to what the amount is. But, yes.”
The plural of anecdote may not be data, no. However, a plural could cover any number of anecdotes from two to infinity — and once it gets high enough, yes, that becomes data.
Plus, Pelosi and the Democrats fail to realize they shouldn’t just be worried about plurals.
In the Senate, one Democratic vote lost — that’s in the singular — and the budget won’t pass no matter what size it ends up being. Remember, the Senate stands tied at 50 votes apiece. Even though the budget can pass on reconciliation, meaning it’s not subject to the filibuster, one Democratic “no” vote blows the whole thing up.
The party is splitting apart on this one, and it appears the reporting contingent is likely to be on the losing end.
Politico reported one of the biggest proponents of the reporting requirement, Oregon Democratic Sen. Ron Wyden, continued to promise “strong” tax enforcement in the spending bill after being appraised of Manchin’s comments. However, a promise that the reporting requirement would stay in the legislation was notably absent.
“We are going to have a strong provision to ensure that we have real tax enforcement,” Wyden, who is chairman of the Senate Finance Committee, said. “We’ve got a lot of wealthy tax cheats.”
The way to go after that, however, is not to allow the federal government to peek into the everyday finances of average Americans, people who are far from the ultra-wealthy tax scofflaws the Democrats are promising to target.
It is, in a phrase, “screwed up.”
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