Since its introduction in August, opposition to the Biden Administration’s proposal to create new bank reporting requirements to the IRS has been steadily growing. The more that Americans grasp the vastness of this new third-party reporting proposal, the more disturbed individuals of all political stripes become with it.
In response to this growing chorus, on Tuesday October 19, the United States Treasury, and progressive Senators Ron Wyden (D-OR) and Elizabeth Warren (D-MA) unveiled an “update” to this plan. But even with this “update” the proposal continues to create privacy and data security issues for most Mississippi bank account holders.
The updated proposal would require banks to report aggregate account activity above $10,000 – an increase from the initially proposed $600 threshold. At first blush, increasing from $600 to $10,000 seems like a significant change. But don’t be fooled – at $10,000 the threshold is still low enough to encompass nearly every Mississippi bank account. Every minimum wage earner in Mississippi would still be affected, and according to USA Today, the average income for tax filers in Mississippi in 2020 was just under $56,000 – so even with the new $10,000 threshold, this proposed “update” made little difference in the number of Mississippians it would impact.
Advocates for this new $10,000 threshold argue that the reporting requirements now target wealthy Americans. But this is just not accurate. According to the same USA Today article referenced above, the average income of the top 1% of Mississippians was just over $750,000 in 2020 – that’s a long, long way from $10,000. Make no mistake, a $600 threshold or $10,000 threshold continues to target working class individuals and nearly every Mississippian. The broad nature of the “updated” proposal will continue to put thousands of taxpayers at risk of serious privacy issues and create real data security risks for nearly all bank account holders in Mississippi.
Bankers know that trust is key to the bank-customer relationship. It’s clear that this idea has caused many Mississippians to worry that this trust will be strained if this proposal becomes law. Thousands of Mississippians and countless more Americans have vocally expressed this concern to policy makers. Thankfully, in response to widespread public concern, bipartisan opposition in Congress is solidifying, and the chorus of state officials opposed to this idea continues to grow. We commend the thousands of Mississippians and countless Americans across the country who have called on Congress to block this bad idea.
On November 3, the House Rules Committee began considering amendments to President Biden’s Build Back Better Act – as I write this, the troubling IRS provisions are not currently included in the bill. But the legislative process is far from over. Hopefully, if Congress does move forward with this large budget reconciliation package, the bipartisan opposition to this troubling proposal will ensure that this bad idea is left out of the final reconciliation bill.
Gordon Fellows is President and CEO of the Mississippi Bankers Association.