Giving the IRS expansive surveillance powers is a recipe for trouble
Democrats need more tax money to fund their plans to build an even bigger government. Where are they going to find it? Just raising taxes isn’t enough – what’s needed is a massive new financial surveillance system that can track every transaction in the economy to ensure proper tax is paid.
As Matt Welch notes, the tax man’s all-seeing eye is exactly what the Biden administration is proposing to make reality in its new budget:
The administration’s proposed “comprehensive financial account reporting regime” 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 bank, loan, and investment accounts,” would be forced to “report gross inflows and outflows” to the IRS. And not just bank accounts: The dragnet would now include PayPal, settlement companies, and “crypto asset exchanges,” for starters.
The new domestic surveillance program, which requires congressional approval, is one prong of a tripartite strategy for transforming the entire global financial system into a harmonious, haven-free collection funnel to the IRS. The second part, which has taken up the bulk of Biden’s multilateral diplomacy thus far, is getting the industrialized world to agree on a global minimum corporate tax of 15 percent, while setting up a system to prevent multinational companies from registering their profits in the lowest-tax jurisdictions.
It’s bad enough to end tax competition, which at least forces countries to pay some attention to how they stack up against the rest of the money-hungry governments of the world. But forcing all transactions through the IRS’ net? That’s a mighty tall order for an agency that can’t even answer its own phones.
But the ambitions help explain the fears people may turn to cash and cryptocurrencies:
“Another concern is that [the] information reporting regime will shift taxpayers toward a greater use of cash,” the Treasury Department’s compliance plan frets. It also notes that cryptocurrencies “already pose a significant detection problem by facilitating illegal activity broadly including tax evasion.” Cash and crypto may be the last currencies compatible with privacy.
Because sometimes people just want to be left alone. That doesn’t make them suspects or cheats. It just means they don’t want to be under the unceasing glare of a state that only cares about getting its cut.