The Biden administration in November dropped its unpopular proposal from the $2.2 trillion Build Back Better plan to make banks share data about customers with the Internal Revenue Service for accounts with total annual deposits or withdrawals of $10,000-plus. However, Treasury Secretary Janet Yellen said she still supports the concept.
The bank reporting idea was key to the Biden administration’s plan to shrink the $7 trillion “tax gap” — the shortfall in taxes that are owed but not collected — and help pay for the $2.2 trillion social policy and climate bill that Democrats are trying to pass this year, New York Times reported. However, banks and Republicans cried invasion of privacy and House Democrats dropped it from the bill passed in November.
“I do support it,” Yellen said at a Senate Banking Committee hearing. “I think it’s important that the IRS have visibility into opaque income streams and that’s an important way of improving tax compliance.”
Gold investor and stockbroker Peter Schiff was quick to point out Yellen’s continued support for the IRS bank-sharing policy legislation.
“Janet Yellen just admitted the @Biden administration wants to empower the #IRS go after low-income tax cheats. Biden clearly believes low income workers are cheating on their taxes by not reporting all of their income. He want to make sure low income workers pay their fair share!” Schiff tweeted on Nov. 30.
Schiff is CEO and chief global strategist of Euro Pacific Capital Inc., a broker-dealer based in Westport, Connecticut. He is also a financial commentator and radio personality.
Hane Selmani replied to Schiff, tweeting, “Much easier to audit the poor. The tax returns of the rich are too long as they take advantage of tax laws and loopholes that the government allows its friends. It sucks to be poor. Everyone puts their hands in your pocket While the rich claim poverty.”
The ultra-wealthy have access to attorneys and deductions they can use to reduce their reported income, such as using business losses to offset income. Because these billionaires tap write-offs, deductions and other loopholes to minimize their income, they appear to the IRS to have net incomes of less than zero, CBS News reported. Some Democrat lawmakers are pushing for a tax on billionaires, arguing that the wealthiest citizens should pay more.
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