As mentioned, that argument was funny: “The administration is seriously arguing for a new oversight regime that would gather data on nearly every American on the off-chance that a billionaire opens several thousand bank accounts.”
Senate Democrats appear to agree. They have raised the threshold from $600 to $10,000 and added new exceptions for wage deposits and payments under federal programs. Spying on nearly everyone is somewhat better than spying on everyone, right?
Still missing from the revised proposal, though, is a reason for the new threshold. If $600 was stupidly low, why is $10,000 the right number? Democrats claim that the higher threshold, united with the added exemptions, targets the rule for “opaque” income streams, such as those from partnerships or proprietorships, which apply primarily to the rich.
Though if it’s the rich they’re after, $10,000 is as arbitrary as $600. A simpler, more effective way of targeting the rich might be to target the wealthy, say, by strengthening enforcement or reporting conditions specifically for those earning high amounts of “opaque” income.
The Democrats haven’t considered such a measure, which suggests they are either confusing the purpose of the new IRS rule, or only want more power in the hands of federal bureaucrats.
The reporting would apply to individual and business accounts, the Treasury Department previously announced. The concept was not a big ask — at least in the eyes of the feds — because banks are already committed to telling the IRS and account holders about much lower numbers, including a $10 threshold on the accrued interest.
Critics in the banking industry and elsewhere announced the $600 threshold wrongly roped in average customers.
On Tuesday, officials stated they were bumping the threshold up to $10,000. That means “financial accounts with money flowing in and out, that totals less than $10,000 annually, are not subject to any additional reporting,” the Treasury Department announced.
The proposal would exclude “wage and salary earners and federal-program beneficiaries, such that only those accruing other forms of income in opaque ways are a part of the reporting regime.”
The proposed monitoring never called for reporting on specific transactions. That’s been a “prominent misconception,” the Treasury Department stated.