The White House on Monday claimed that opposition to a proposal to dramatically widen the powers of the IRS is being driven by large banks and the wealthiest Americans, drawing fresh pushback from critics.
“They’re getting desperate now that average customers and consumers found out about this IRS snooping proposal on all bank accounts, and they’re trying to deflect and focus in on banks and the so-called wealthy and billionaires,” Paul Merski, group executive vice president, congressional relations and strategy for the Independent Community Bankers of America, told The Epoch Times.
“They’ve gotten caught and were busted. This is going to be a dragnet on virtually everyone’s bank accounts in the United States,” he added.
The plan is designed to pay for President Joe Biden’s spending package for childcare and healthcare, and has not been approved by Congress. It would force banks and other financial service companies to track and report to the government on all business and personal accounts that have $600 or more in transactions in a year.
Merski was speaking after White House press secretary Jen Psaki claimed that opposition to the proposal is driven, in part, by banks that do not want to deal with more onerous requirements.
“It should not be lost on anyone that the loudest opposition to these proposals and the biggest ad spending against them is from the biggest banks, who simply do not want to be bothered by additional reporting on inflows and outflows,” Psaki told reporters in Washington during a press conference on Monday.
“I would note that the top 1 percent is responsible for $163 billion a year in owed but unpaid taxes. Let’s be clear what this is about: it’s about big banks deciding to protect the wealthiest Americans,” she said.
While big banks and some wealthy Americans do oppose the plan, among the opponents are people with fewer assets and smaller financial institutions.
Over 40 trade groups wrote to the leaders of the House of Representatives earlier this year, arguing that the plan raises “significant privacy concerns” and “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.”
The proposal has also drawn widespread criticism from Republicans, who note the IRS was weaponized during the Obama administration to spy on conservative groups.
Defenders, on the other hand, say the tax compliance proposals would close the gap between taxes owed to the government and taxes actually paid. They also note that the IRS already gets lots of information and claim more wouldn’t be a big deal.
The Independent Community Bankers of America represents thousands of community banks that collectively hold trillions in assets and deposits, but individually do business on a much smaller scale than larger banks.
“We don’t have multi-millionaires or billionaires banking at small town mainstream community banks, but yet, all these banks are going to be forced to report to the IRS on the customer’s transactions, regardless of their tax liability,” Merski said. “So the key point is this has nothing to do with your tax liability. This is just the Treasury, the federal government, the Biden administration, assuming everyone is a tax cheat, so then we have to profile your financial transactions. It’s a dragnet that’s going to sweep up everyone, and that’s why we’ve sounded the alarm on this.”
Tom Ozimek contributed to this report.