McRae calls Biden’s American Families Plan ‘largest data mining exercise in U.S. history’
JACKSON, Miss. (WLBT) - Mississippi State Treasurer David McRae has joined 22 state financial leaders in opposing a plan by President Joe Biden that they say would empower the IRS to have access to the private banking activity of more than 100 million Americans.
The proposal in question is the American Families Plan.
According to the White House, provisions of the bill include providing funding for free pre-school for three and four-year-olds, two years of free community college, and additional investments to provide four-year education to low and middle-income Americans.
The plan also would provide direct support to families to supplement childcare costs, create a national paid family and medical leave program, and extend tax cuts provided to low and middle-income workers that were put in place as part of the American Rescue Plan.
Those provisions aside, members of the State Financial Officers Foundation say the plan’s tax compliance rules represent what would be the “largest data-mining exercise in U.S. history.”
“We do not believe the federal government should give the IRS the unprecedented and unconstitutional power to peer into law-abiding citizens’ private financial accounts,” the organization said in an open letter to President Joe Biden and Treasury Secretary Janet Yellen. “This would be one of the largest infringements of data privacy in our nation’s history and is a direct assault on the financial disclosure of all Americans.”
To ensure compliance, the plan would include dedicating an additional $80 billion in funding to the IRS over the next decade to update technology and hire additional agents.
Efforts also would be designed to close what the Biden administration calls the “tax gap,” or the amount of federal taxes voluntarily paid each year versus the amount that is actually owed.
SFOF says to make up that gap, the plan would require financial institutions like banks and credit unions to turn over information on the bank accounts of individuals who have inflows or outflows exceeding $600.
The plan would require banks and other institutions to “report gross inflows and outflows with a breakdown for physical cash, transactions with a foreign account, and transfers to and from accounts from financial institutions,” according to an explanation of the plan published by the U.S. Treasury.
The guidelines would apply to business and personal accounts.
SFOF argues that having to provide this information would “have a devastating cost impact on small community banks and credit units” and would put more American’s financial information at risk of cyberattacks.
“The IRS is a constant target of cybercriminals and in recent years has suffered significant breaches,” the letter states. “This reporting requirement will consistently put a large amount of sensitive financial data in transit to the IRS, (which) will be at constant risk of cyberattack.”
The bill has not been passed and is currently being debated by Congress.
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