Biden Plan Would Monitor What You’re Spending on Venmo, Reduce Financial Privacy
Very late to the party, last month I made my first financial transaction using Venmo.
It’s hard to write to the next line and not come off like President Bush 41 being wowed by seeing scanners at a grocery store, but I was amazed at how quick and easy it was to pay someone using the service.
My gardener told me that he had started collecting payment during Venmo and urged me to consider using it as he would get payment immediately instead of up to a week later using my bank’s bill pay service.
I had planned to use services like Venmo and PayPal more in the future to pay for goods and services. But an invasive proposal from the Biden Administration that is working its way through Congress is making me think twice about paying for anything online.
Part of the so-called “American Families Plan,” which would earmark $80 billion in funding for beefed-up IRS enforcement to secure at least $780 billion in tax revenue to pay for the Biden Administration’s multi-trillion-dollar spending priorities, would “create a comprehensive financial account information reporting regime.”
Reason’s Matt Welch writes that the plan would “dramatically increase the types of financial institutions and transactions exposed to the feds’ prying eyes.” All business and personal accounts from financial institutions – including peer-to-peer services like Venmo and PayPal – would be forced to report aggregate account inflows and outflows above $600 to the IRS.
Americans for Tax Reform’s Isabelle Morales writes, “President Biden claims that this proposal is designed to ‘crack down on millionaires and billionaires who cheat on their taxes’ . . . however, it is unclear how monitoring Venmo accounts – many of which are held by younger Americans – contributes to this goal.”
The prospect of arming IRS bureaucrats with an enormous amount of personal financial information (think how many aggregate account transactions we all have over $600 each year!) is a chilling one indeed. Policymakers should think twice about giving a government agency with a history of targeting innocent Americans based on their political beliefs (remember Lois Lerner) a massive new budget and sweeping new powers.
Arming IRS bureaucrats with so much information and people’s routine financial transactions could expose many Americans to unwarranted IRS scrutiny – not just millionaires and billionaires who are supposedly not paying their taxes.
Not too many years ago, many liberals in Washington and Sacramento championed the cause of tough financial privacy legislation to strengthen protections from people’s personal financial information from being exposed. Apparently, those concerns don’t apply when the government is trying to shake down more revenue to fund a massive spending spree.
Thankfully, some members of Congress are concerned about safeguarding the financial privacy of Americans. U.S. Sens. Kevin Cramer (R-North Dakota) and Mike Crapo (R-Idaho) have introduced the “Tax Gap Reform and Internal Revenue Service Enforcement Act.” Among other provisions, the bill would prevent the IRS from targeting Americans for audits based on their political beliefs and also write into law President Biden’s pledge not to increase audits of people making less than $400,000 per year.
“If lawmakers move forward with an Internal Revenue Service (IRS) budget boost anyway, these reforms and more should be considered prerequisites for any major proposed increase in the IRS budget and would both safeguard taxpayers’ rights and support taxpayers’ interest in an effective, modern, and agile IRS,” said National Taxpayers Union president Pete Sepp in a statement.
The whole debate makes one want to never again use Venmo or even a bank and instead go back to the old days of hoarding cash in your mattress.
Tim Anaya is the Pacific Research Institute’s senior director of communications and the Sacramento office.