We hear a lot from the news about the proposed American Families Plan in regards to raising the corporate tax rate and the taxes on higher wage earning individuals. It makes for a great sound byte, especially when paired with the other highlights of the plan. These include higher Child Tax Credits and assistance with paying for daycare, higher education, and healthcare.
What has not been widely published or even acknowledged is the planned Tax Compliance, which is the proposed requirement of all community banks and other financial institutions to report any transactions of $600 or more to the IRS. This is regardless of the permission given by the account holder and would be valid for both business and personal accounts.
If this is enacted as written, it means not only an unacceptable invasion of privacy, but also places a huge burden on financial institutions and individuals. In addition, it also means more work for the IRS, which is already stretched thin.
According to several news sources, the bill may be hard to pass as written. It would require bipartisan support, which is a tall order, or at least the support of all 50 Democrats. Democrats feel like the bill does not do enough and the Centrists are concerned about the price tag, which is estimated at $1.6 trillion. Meanwhile, the bill has no support from the Republicans as they feel it expands the reach of the government too far. They also do not like the price tag and are unhappy that it also repeals tax cuts that were made in 2017 by the Trump Administration.
If you would like to learn more about the Tax Compliance Agenda, the entire PDF is available from the United States Treasury Department here.