The U.S. currently boasts 18 intelligence agencies, including not just the CIA and NSA but also intelligence outfits housed within agencies as far-flung as the Departments of Energy and Treasury. Now, Democrats are looking to add, in effect, a 19th.
A provision tucked into the House reconciliation bill would let the Internal Revenue Service peer into the bank account of virtually every American. If passed, the rule would require financial institutions to report the cash flows of every account with more than $600 in deposits or transactions.
The White House says these powers are necessary to prevent tax fraud. According to its own projections, “improved information reporting” would generate an average of $46 billion in additional revenue annually — a little more than 10 percent of the annual spending in the administration’s $3.5 trillion proposal. Here’s the proposition: You permanently sacrifice your financial privacy, and the Democrats get a small step closer to funding their agenda. In reality, these are likely rosy projections, and after enforcement costs it isn’t even clear the snooping would raise much revenue at all.
That’s if the IRS manages to wrangle the data correctly. Medicare and Medicaid paid out $130 billion in improper payments last year alone, despite receiving thorough information on each claim. Elsewhere, unemployment fraud cost the federal government at least $87 billion during the pandemic. But Treasury secretary Janet Yellen claims the IRS will overcome perennial bureaucratic incompetence and track down “opaque income streams that disproportionately accrue to the top.”
Wishful thinking, but even so: If it’s high earners we’re worried about, why spy on everyone? Yellen answers that “it’s important to have comprehensive information so that individuals can’t game the system and have multiple accounts.” 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.
That explanation is an obvious farce, one that insults the intelligence of the American public. Giving any government entity unwarranted access to the financial information of individuals is a clear and arguably unconstitutional violation of privacy, but in light of its history, giving that power to the IRS is downright foolish.
This is the same IRS that spent two years under the Obama administration targeting the tax-exempt status of conservative nonprofits — imposing burdensome requirements on opposition groups and then illegally disclosing the confidential information of some of those groups to the media. In the aftermath of the scandal, senior IRS official Lois Lerner grew suddenly enamored with the Constitution and invoked her Fifth Amendment right against self-incrimination. If her privacy matters, yours does, too.
Democrats are understandably desperate to try to pay for as much of their spending blowout as possible, given their new contention that it really “costs nothing” because the reconciliation bill supposedly won’t add to the deficit. But this move on bank accounts would represent a new, jaw-dropping level of federal intrusiveness and is a power no government should have. Biden officials from Yellen on down have had trouble defending it — because it is literally indefensible.
Something to Consider
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