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Nancy Pelosi finally admitted that, faced with Sen. Joe Manchin's and Sen. Kyrsten Sinema's laudable refusal to back down, the Democrats are not going to get their $3.5-trillion spending bill. However, Pelosi insists that the bill will still allow the feds to track every banking transaction over $600, something that manifestly violates the Fourth Amendment.
After Pelosi admitted that Democrats would have to trim their spending bill, she was asked whether the bill would continue to require banks to forward to the IRS all $600 transactions in bank accounts. Her answer, emphatically, was "yes":
"Yes. There are concerns that some people have, but if people are breaking the law and not paying their taxes, one way to track them is through the banking measure," she told reporters. "I think 600...that's a negotiation that will go on as to what the amount is, but yes."
The "concerns" Pelosi referenced are coming from a wider array of critics as banks, other businesses, lawmakers and trade associations are rising in opposition to the plan.
"The effects of this scheme are serious and far-reaching, putting the IRS between millions of people and their banks," said Billy Rielly, spokesman for the Consumer Bankers Association.
Under Biden's Build Back Better plan, the IRS would receive a major increase in funding to beef up their auditing efforts. Democrats argue the increased revenue from audits would more than pay for the investment and help fund provisions in the $3.5 trillion bill.
This issue sparked national controversy, though, when news broke that as part of beefing up the IRS audits, banks would be required under the Democratic proposal to report to the IRS bank transactions over $600 as well as transactions for accounts containing over $600.
Put simply: The plan will vastly expand the IRS's reach; impose huge reporting burdens on banks, driving up costs (which will increase fees and further lower interest rates on consumer savings accounts); and allow the IRS to wander freely through people's bank accounts looking for cash and crimes.
There is so much wrong with the plan that it's hard to know where to begin. First, normal people don't want the most hated branch of government to grow bigger and stronger. Second, it will hurt the working and middle classes to make banking more costly and inconvenient. And then there's that third one, the really important one, which is that the IRS should never be allowed free access to people's bank accounts to search for tax crimes.
Until Biden, that's not how it worked in America. Our system mandates that if the government wants to search through someone's property, it must first prove to a judge that there's probable cause that the person committed a crime, and only then may it get a narrowly drawn search warrant to seek evidence of that crime. That's because we have a Fourth Amendment:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
That's an inherent right, not some privilege the government grants us. If the government wishes to infringe upon it, it must meet the normal standard for doing so — that is, it must show a pressing government need and that it's chosen the narrowest possible method to meet that need.
For example, back in 1970, a $10,000 cash deposit was equivalent to a $70,500.00 deposit today. It was a substantial sum far greater than most Americans could afford and was almost invariably associated with money laundering. Congress, therefore, passed the narrowly drawn Bank Secrecy Act requiring banks to report cash deposits greater than $10,000.
That's significantly different from $600 transactions of any type in 2021, especially in an inflationary period. The law will allow a fat and happy IRS to wander freely through almost every person's bank account looking for money to seize. It's effectively a general warrant — and general warrants were one of the British government abuses that gave rise to the American Revolution.
The Biden administration knows this too, which is why it trotted out the execrable Janet Yellen to give a moronic explanation for requiring this $600 reporting — it's to catch tax-dodging billionaires:
“There’s a lot of tax fraud and cheating that’s going on.” @SecYellen tells us the proposed $600 IRS reporting requirement for banks is “absolutely not” a way for the government to peek into American’s pocketbooks but to hold billionaires accountable.pic.twitter.com/u208I43f98— Norah O'Donnell ???? (@NorahODonnell) October 12, 2021
That's a bald-faced lie. The requirement is to catch you. It's to sniff out your every transaction and dog your every footstep. And it's to make sure that while those billionaires successfully hide their transactions in myriad shelters through endless loopholes, you get squeezed out of every penny you've painfully earned and saved.