Democrats Will Back Down on Controversial IRS Proposal to Monitor Bank Accounts
Author: Greg Valliere
October 19, 2021
Democrats Will Back Down on Controversial IRS Proposal to Monitor Bank Accounts
October 19, 2021
TALK WITH FINANCIAL ADVISERS AND THEIR CLIENTS and we guarantee that one of their first questions will involve the despised proposal to have the Internal Revenue Service monitor activity in bank accounts of $600 or more.
THIS WAS GOING TO BE INCLUDED in President Biden’s social spending bill, in an effort to curb tax cheating. But it has generated intense grass roots opposition across the country — focused on an intrusive IRS — and the Democrats are about to cave.
WITHIN THE NEXT DAY OR TWO, Democrats will raise the dollar threshold to provide the IRS with additional information on bank accounts. Conservative talk radio now owns this issue, and members of Congress have been inundated with angry emails and phone calls.
THE DEMOCRATS’ FALLBACK will be a provision that will require additional information for accounts of $10,000 or more — but even this will encounter strong opposition; some members of Congress want the threshold raised to $50,000, and many others want the provision stripped entirely from the reeling social spending package.
TREASURY SECRETARY Janet Yellen — a brilliant monetary policy expert who can be tone deaf on political issues — wants the IRS to crack down on tax cheats and is unlikely to support any further watering down of this proposal.
TREASURY HAS PREDICTED tax evasion of roughly $7 trillion over the next 10 years. Estimates by Treasury officials assert that about $160 billion will go unpaid this year in taxes by the richest 1 percent of taxpayers.
WE UNDERSTAND THAT TAX EVASION is a major problem, but the Democrats have a self-inflicted public relations debacle. There’s a growing narrative that the IRS is snooping on small savers, and if you don’t believe us, just talk with investors, most of whom are incensed over this proposal.
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THE COMPETITION FOR WORKERS heated up yesterday as Amazon announced that it will hire 150,000 workers for the holidays, which would be 50% more seasonal workers than in 2020. As one of our readers asked yesterday: “Where are they going to get these bodies?”
AMAZON WILL FUEL THE INFLATIONARY FLAMES by offering signing bonuses and a starting wage of $18 an hour. Facing fierce competition for entry-level workers, the company will offer signing bonuses of as much as $3,000, depending on location, and as much as an additional $3 per hour for workers willing to work overnight or weekend shifts, Bloomberg reported yesterday.
IT STRIKES US THAT INFLATION will persist for several more quarters — not because supplies like computer chips are tight, but because there aren’t enough workers. Immigration reform could be a major part of the labor solution, but Congress is hopelessly gridlocked on that issue.
THE LABOR MARKET WILL STAY TIGHT: $18 per hour may not be enough to lure workers to the grueling Amazon climate — not when the competition is generous government benefits: increased food stamp eligibility, the child tax credit, housing benefits, etc. Can Amazon find 150,000 more workers? We doubt it.
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ONE OF THE PERKS OF WORKING IN THIS CITY is that you occasionally meet extraordinary people. That surely applies to Colin Powell, one of the most impressive men we ever encountered in our years in Washington, a throwback to selfless generations that believed in service to the country.
THE SON OF HUMBLE IMMIGRANTS, Powell became a superstar — and a racial pioneer — for over three decades. He had three characteristics sadly missing today in Washington: gravitas, fearlessness, and charisma. He made mistakes but took the blame. He was larger than life, like John McCain and others of their generation, driven by a profound sense of duty.
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