In Michell Meads’s novel, Succubus Blues, the protagonist declares, “Vampires. Honestly, they’re like children sometimes.” This pronouncement perfectly captures Bidens’ latest efforts to get more money out of the American taxpayer. Much like a greedy, unmannered child, the Biden Administration is using its vast storehouse of powers via the IRS to surveil our mundane banking transactions in the hope of squeezing out more blood to sate their seemingly unending appetitte to spend. The plan is nothing short of a vampire’s fantasy.
The Vampire Plan
As Fox Business News reports, “Under the proposal, banks, credit unions and other financial institutions would be required to annually report customers’ account deposits and withdrawals of $600 or more to the IRS.” In an interview with CBS’ Norah O’Donnel, Treasury Secretary Janet Yellen defended the plan, saying, “’I think this proposal has been seriously mischaracterized. The proposal involves no reporting of individual transactions of any individual.”
So it’s not that we might have good reason to be suspicious Uncle Sam is being disingenuous. Instead, Yellen claims the plan has not been understood appropriately, arguing, “We’re simply asking to add two boxes to that [IRS 1099-INT] form, one that would be the aggregate inflows into the account over the course of the year, and the second would be the aggregate outflows from the accounts. So it’s not detailed information.”
Well, when you put it that way, I feel so much better. Why do I feel so lightheaded?
The proposed plan, according to CBS News, “is part of a suite of laws that would close the so-called information gap — taxes that the government doesn’t know to collect because of income that goes unreported. A vast amount of those unpaid taxes belongs to the wealthiest 1% of taxpayers — by one estimate, $160 billion a year goes unpaid by this group.”
The Vampire’s Trick
But something doesn’t add up here in my frontal lobe, the seat of logic and reasoning. To begin with, if the IRS is only looking at an aggregate number, how would they determine which individuals are violating IRS laws? To do so would mean they would eventually have to dig deeper into the activity of individual bank account holders. Borrowing from vampire lore, the proposal would act as an initial invitation to the IRS, which is all that is needed to let the feasting begin.
Steven Rosenthal, a senior fellow with the Urban-Brookings Tax Policy Center, makes this point: “The Biden administration believes that aggregate information [for annual deposits and withdrawals] will help the IRS find tax cheats. I’m skeptical. I don’t think it will. And one of the reasons I don’t think it will is because it’s not transaction by transaction. It’s just an aggregate amount and it bears no relationship to income tax liability.”
Or, how about another analogy? If we applied the same monitoring logic to the college admissions scandal, you can immediately begin to see the folly. After all, if we just took an aggregate of all of the bribery amounts for the individuals involved, that information would not indicate who was actually up to no good. Of course, it is rational to say that the aggregate number would potentially reveal something fishy was going on, but that’s not really the point because the proposal is being sold as a macro, not a micro, approach to monitoring, which calls into question the integrity of the overall intent.
Therefore, the IRS would have two options. Compel banks to turn over individual-level bank account information under the current plan, or merely add new language to the plan that would give them the official authority to do so. Either way, the proposal appears to be nothing more than a rhetorical Trojan Horse to gain access to more detailed, private information.
Steve Johnson, a professor at Florida State University and scholar on tax procedure, noted that the Treasury’s proposal included providing the Secretary with “broad authority to issue regulations necessary to implement this proposal,” according to CNN. Johnson warns that the reporting requirement could be expanded from just the two pieces of information, which currently only targets annual gross inflows and outflows, to include much more information, “through the backdoor of regulations.”
And this is a salient and profound point. People are often duped by not only the language of a proposal but from not understanding how regulators use this information to expand the scope and reach of any plan. The U.S. Chamber of Commerce makes just this point, explaining, “Many of the detailed rules citizens identify as laws are not actually written by elected representatives; instead, they are written by executive agencies that are delegated authority by Congress to interpret and administer broad policies expressed in the underlying statutes.”
Does anyone really believe giving more power to the IRS is the way we nurture democracy? Are we to surfeit the beast in hope that it will ensure our prosperity? Dracula would be proud.
The $600 Vampire
Another inconsistency that needs further examination is the threshold being proposed. Since when did $600 transactions become a marker of the fiduciary exploits of the “evil 1%”? Are we suddenly to believe that the wealthiest among us regularly earn or spend such modest amounts and use their banks as a shield to hide their pecuniary goings-on? It just doesn’t hold up in the light of day.
Furthermore, the current threshold of $10,000 transactions the IRS uses to justify investigations is already fraught with controversy. As the Americans for Tax Reform points out, “The IRS Criminal Investigation Division (IRS-CI) regularly violated taxpayers’ rights and skirted or ignored due process requirements when investigating taxpayers for allegedly violating the $10,000 currency transaction reporting requirements, according to a 2017 report by the Treasury Inspector General for Tax Administration (TIGTA). In addition, less than one in ten investigations uncovered violations of tax law.”
Moreover, the wealthiest of Americans skirt paying taxes by borrowing against their investments. As ProPublica reports, “America’s billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people. Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell.”
Given that fact, it may indeed be a breach of morality given the average U.S. citizen does not have such tax avoidances schemes. But if that’s true, then fixing the law to capture those monies would be the right thing to do, not delving into the minutia of “inflows” and “outflows” of banks for what amounts to rather petty transactions. The ugly truth is that both the language and the threshold amount point to the fact that the IRS is not going after the ultrawealthy; they are going after individuals that make their living in the gig economy.
Nina Olson, a former head of the IRS taxpayer advocacy office, states the obvious, “Workers who are under-reporting their income now will become guilty of nonpayment next year and subject to penalties and actions by the agency.” In this sense, the IRS will shift the burden of collecting taxes onto the shoulders of people who are earning meager incomes, certainly not even close to the 1% cadre that the plan supposedly targets.
TechNet spokesman Steve Kidera framed it this way in an email, writing this proposal “adds a significant burden to the gig economy and small business workers at the worst possible time.” So much for the Biden Administration’s concern for the little guy he purports to defend and protect. Nosferatu wants the blood of the common person because there are so many more of them than the rich, who continually find ways to vampire-proof their houses.
“Look deeply into my eyes. You are getting veddy shleepy. Show me your checking account.”
The Vampire’s Folly
Beyond the deceptiveness of this proposal lies another reality. Not only will this proposal not be likely to be helpful, but it will also likely make the situation worse because it will probably lead to more hiding of funds. Again, not to be too logical here, but if the ultrawealthy (who actually pays more than 40% of the national tax bill), the supposed source of all our ills, are so savvy in their penchant to avoid paying taxes, would they not just engage in more of the supposed chicanery the IRS is so worried about?
Jack Hanney, with Patriot Gold Group, calls it an enormous breach of privacy, saying, “They are trying to guise it as going after the wealthiest of Americans, but the reality is this would affect more than 100 million American households.” That’s becasue the welathy would park their money elsewehre. If that’s what our government want, that’s fine. Just don’t pretend this vampiric wet dream is about that, becasue is’s so clearly not.
Options such as PayPal and fintech companies like Chime and Simple, along with the use of prepaid debit cards will likely become employed as a means to avoid what many working-class folds will perceive as unwarranted government intrusion and harassment.
Yet, those won’t work either, because a really crafty vampire keeps up with the times in an effort to sus out all corporal opportunities. The Vermont Dailly Chronicle explains, “Not only would this [pla] include the bank, loan, and investment accounts of virtually every individual and business, but it would also include third-party providers like Venmo, CashApp, and PayPal.” After all, the vampire is thirsty and he needs to feed.
The following reply by an ordinary citizen to an article about the plan in the Vermont Daily Chronicle says it all:
“This should not even be on the table. It’s[a] huge overreach and I believe has nefarious goals of determining where you put your money. This could flag any purchase over 600, your monthly mortgage, money you took out. Most people don’t play with 10k transactions very often but everyone pays 600 a month for something. I’ll go all the way back to cash if they pass it.”
Some more independently-minded Democrats, such as Tulsi Gabbard, actually get what’s at stake, tweeting, “Let me get this straight: Biden wants the IRS to violate our privacy by collecting info on all financial transactions over $600 so they can stop really rich people from hiding money. It’s just Big Brother trying to get more power to snoop on and control regular Americans.”
Alan Butler, executive director and president of the Electronic Privacy Information Center, echos this perspective, arguing “If you are going to impose new system, a further exposure of people’s financial information and a major reporting burden, you better justify it. The rationale is narrowing the tax gap, but data on inflows and outflows above $600 isn’t going to do it.”
Some Republicans are also expressing opposition. Citing concerns of the expansion of the regulatory state via IRS surveillance mechanisms, Maine Representative John Andrews claims, “It is an expansion of the surveillance state and it is time to pushback. As state legislators it is our duty to stand up, be proactive and protect those we represent. This resolution should be filed and supported in every statehouse in the nation. Legislators need to be bold and find ways in their state statutes to legislatively nullify this unconstitutional abuse of power.”
And of course, logically, banks are pushing back against this dubious scheme.“We continue to believe this proposal jeopardizes the privacy and security of financial information for nearly every U.S. account holder,” said John Kinsella, vice president of tax policy at The American Bankers Association. “It would trigger an unprecedented amount of taxpayer information, most of which will be irrelevant to calculating taxable income, with significant cost and data security risk to taxpayers.”
Banks will also bear the burden of this tax-raising scheme. Grace Newcombe, director of federal advocacy for the Alabama Credit Union Association, contends “The IRS reporting requirement proposed by the Biden administration would place a significant burden on our state’s credit unions,” adding “Forcing credit unions to comply with this additional reporting requirement would be costly to all credit unions and would be nearly impossible for the small credit unions who lack the dozens of compliance lawyers and staff that some larger institutions employ.”
One has to wonder if there is not a darker plot in the hatching, one that would seek to use regulations to quash smaller banks while simultaneously making larger institutions more amenable to do the biding of its vampiric overlords in the federal government. But alas, that is a rabbit trail for another time.
The Vampire’s Invasion of Privacy
And banks are not the only ones expressing concerns about the potential negative consequences of this plan, which ultimately amounts to an invasion of privacy and the ushering in of Nanny-state measures to feed Lestat and company. This is why Nebraska state Treasurer John Murante felt compelled to release the following statement:
“This could lead to a tremendous invasion of privacy the likes of which our country has never seen. Millions of law-abiding Americans would suddenly have their bank accounts opened to federal investigators for no more reason than buying a refrigerator. This is simply unconscionable. To make matters worse, under this proposal, saving for college could put an American family on the IRS’s radar, costs that most likely will be passed on to the public.”
But, some vampires are especially crafty at dissembling their true intentions. The queen vampire herself, Nancy Pelosi, knows what’s best for her brood, avowing “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.” Reassuring words from someone who has seen her share of scandals involving investments and money. Being lectured by a multimillionaire who has used inside baseball to line her own pockets is the height of temerity, if not the pinnacle of hypocrisy.
The Vampires Master Plan
Still, when you put all the pieces together, this proposal fits perfectly into the overall scheme to purge as much money as possible from the bloodstream of our electorate. Whether it overregulating cryptocurrency exchanges, printing money to buy votes, or surveilling our bank accounts, our federal government seems hell-bent on exposing the collective American jugular so it can sink its blood-draining incisors to feed its unrelenting thirst to tax and spend.
Make no mistake about it. This is not just about taxation. It’s about spending. As Yellen herself put it, “The big picture is, look, we have a tax gap that over the next decade is estimated at $7 trillion. Namely, a shortfall in the amount the IRS is collecting due to a failure of individuals to report the income that they have earned.” This obfuscates the reality of the situations, however. We do not have just a taxation problem. We have a spending problem.
So, be careful, my friend–do not invite that vampire in, no matter how innocent or childlike they may seem, or they will simply drain us all, till we are nothing more than a pale reminder of who we were.