Please do not leave this page until complete. This can take a few moments.
While we firmly believe Americans should honor their tax obligations, Congress’ efforts to raise more federal revenue from those who cheat our federal tax system risks ushering in unwelcome and unintended consequences for working men and women across Maine.
The “tax gap” proposal put forward by the Biden Administration would require banks and other financial institutions to report to the IRS all inflows and outflows for customers’ accounts, including personal accounts with an activity or balances of $600 or more. That means that if the savings, checking, money market or other accounts you have with your local bank where either activity or balances exceed that amount, your information will go to the IRS.
This is problematic for a host of reasons. For starters, there’s already a high level of distrust of government in general and the IRS in particular. This proposal will not help.
Banks and other established financial institutions have worked hard over decades to establish trusting relationships with families and individuals saving for their first house, retirement, college fund, that new car, vacations, paying monthly bills, and more.
Reporting many of these routine transactions to the IRS, as this legislation would require, could damage these relationships, resulting in people leaving their banks and falling prey to non-bank lenders and check cashers, incurring exorbitant interest rates and fees in the process. Some consumers will jeopardize their personal security by carrying cash.
In addition, certain communities, including those recently arrived from other countries with authoritarian regimes that eavesdrop on their citizens, will turn away from the banking system. This will occur at the very time efforts in Maine are underway to help these communities achieve financial literacy, financial stability and financial security.
According to the U.S. Treasury Department, the IRS experiences 1.4 billion cyberattacks annually. That’s not a great confidence builder when it comes to protecting the financial information for hundreds of thousands of Mainers.
A recent survey by the Independent Community Bankers of America confirms what a questionable idea this is. The survey, released Sept. 7, shows that “two-thirds of voters (67%) oppose a proposal that would allow the IRS to collect bank account deposit and withdrawal information from American consumers.” The survey also reports that more than three in five voters (64%) do not trust the IRS much or at all to monitor their deposit and withdrawal information, including 50% of Democrats, 73% of Independents, and 75% of Republicans.
Tax simplicity is an important goal that promotes tax compliance. The “tax gap” proposal aimed at finding mischief-makers who avoid paying their fair share of federal taxes would create new complexity for the rest of us and drive many away from banks altogether. Strengthening IRS funding and overhauling outdated technology to use existing reporting to target questionable tax returns is a much more efficient and effective approach to closing the tax gap. We urge Maine’s federal policymakers to first ensure that the IRS’ information collection and oversight is being fully utilized before adopting new requirements that will bring with it unwelcome and unintended consequences for working men and women around our state.
Jim Roche is president of the Maine Bankers Association, which represents Maine’s banking industry and its 9,000 employees statewide. Maine’s 29 retail banks operate 454 offices in nearly every community throughout the state.
Thank you for keeping us informed on this important topic. At a time when our own government is acting more authoritarian all the time, and businesses such as Chase Bank are shutting down prominent Conservatives, the last thing we want is for our government to have more control over people's banking information.
The Giving Guide helps nonprofits have the opportunity to showcase and differentiate their organizations so that businesses better understand how they can contribute to a nonprofit’s mission and work.
Learn MoreWork for ME is a workforce development tool to help Maine’s employers target Maine’s emerging workforce. Work for ME highlights each industry, its impact on Maine’s economy, the jobs available to entry-level workers, the training and education needed to get a career started.
Learn MoreFew people are adequately prepared for all the tasks involved in planning and providing care for aging family members. SeniorSmart provides an essential road map for navigating the process. This resource guide explores the myriad of care options and offers essential information on topics ranging from self-care to legal and financial preparedness.
Learn moreThe Giving Guide helps nonprofits have the opportunity to showcase and differentiate their organizations so that businesses better understand how they can contribute to a nonprofit’s mission and work.
Work for ME is a workforce development tool to help Maine’s employers target Maine’s emerging workforce. Work for ME highlights each industry, its impact on Maine’s economy, the jobs available to entry-level workers, the training and education needed to get a career started.
Few people are adequately prepared for all the tasks involved in planning and providing care for aging family members. SeniorSmart provides an essential road map for navigating the process. This resource guide explores the myriad of care options and offers essential information on topics ranging from self-care to legal and financial preparedness.
In order to use this feature, we need some information from you. You can also login or register for a free account.
By clicking submit you are agreeing to our cookie usage and Privacy Policy
Already have an account? Login
Already have an account? Login
Want to create an account? Register
In order to use this feature, we need some information from you. You can also login or register for a free account.
By clicking submit you are agreeing to our cookie usage and Privacy Policy
Already have an account? Login
Already have an account? Login
Want to create an account? Register
This website uses cookies to ensure you get the best experience on our website. Our privacy policy
To ensure the best experience on our website, articles cannot be read without allowing cookies. Please allow cookies to continue reading. Our privacy policy
1 Comments