In yet another move to increase the federal government's presence in your life, the Biden administration wants to sic the IRS on your Venmo account. 

Biden has proposed $80 billion in funding for additional IRS enforcement. As part of this proposal, banks and third-party payment providers, like Venmo and CashApp would be required to report account holders’ aggregate account outflows and inflows.  

"The proposal would require banks to report annual account inflows and outflows to the Internal Revenue Service. The requirement would also extend to peer-to-peer payment services such as Venmo," notes the Wall Street Journal.

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 average Venmo transfer amount is $60 and is popular among young people, with over 7 million Venmo users belong in the 18-34 age group. For users who have undergone identity verification, the weekly spending limit is $7,000. These trends exist for most third-party payment providers.

It is hard to see how millionaires and billionaires are using Venmo or CashApp to launder mass amounts of money. 

This is just another effort to expand the power of the IRS. Rest assured, the IRS will use these powers against Americans of all income levels.  

At a time when Americans are already struggling, these new reporting rules would create unnecessary burdens. As noted in this excerpt from Forbes: 

It may create problems, however, that should be considered and addressed as this plan works its way through Congress. For example, consider a young couple saving up to buy a home. All savings are put into the “dream home” savings account. Then, when it comes time to make the down payment, the $50,000 dream home savings goes into the regular checking account, which is then wired to the seller’s escrow account. Buying a home is not a taxable event (at least for federal income tax), selling one is. Will the IRS receive information from the financial institutions that leads to an audit? 

Paul Merski, vice president of congressional relations at Independent Community Bankers of America, voiced his criticism of the proposal: 

Banks already report millions of transactions a day to the Financial Crimes Enforcement Network in the form of currency transaction reports, in addition to suspicious activity reports, which are required when potential illicit activity is detected by a bank. Banks are required to submit currency transaction reports when a deposit or withdrawal is $10,000 or more, a threshold that’s already very low, Merski said. 

Merski said the proposal, as written, is akin to “sending your bank statement to the IRS every month,” which would be opposed by the banking industry because of the reporting burdens already required by federal regulators. 

“The federal government can’t track all of that—any more requirements would be adding more hay to that haystack,” he said. 

As also noted by the Wall Street Journal, the bank account snooping will give the IRS an "enormous" quantity of new data: 

It would also create an enormous flow of information that the IRS would have to learn how to manage and use. 

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Congress will have to weigh the potential burdens and privacy concerns against the revenue gains as it considers the plan. 

Observers are rightly skeptical that this plan will be able to generate anywhere near the $780 billion promised by the Biden administration. As noted in this excerpt from Yahoo News: 

Previous government estimates put the benefits of increased IRS funding much lower. Last year, the Congressional Budget Office estimated that an additional $40 billion of funding over 10 years would increase government revenues by $103 billion. 

Even Obama-era IRS chief John Koskinen questioned the Biden $80 billion funding request. "I'm not sure you'd be able to efficiently use that much money," he said. 

Congress should refrain from passing a proposal that would give the federal government unprecedented access to your private information.  

Voters want infrastructure to be paid for with spending cuts, not tax increases, according to a poll conducted by Echelon Insights.  

Specifically, 50 percent of voters said they wanted to pay for infrastructure through spending cuts, only 23 percent say they want to pay for it through tax increases, and 9 percent said they wanted to pay for it through adding to the national debt.  

Among independents, 53 percent want the plan paid for through spending cuts, 24 percent through tax increases, and 4 percent through adding to the national debt. 

This is bad news for the Biden administration, as his two-part infrastructure plan includes trillions of dollars in new tax hikes.  

Specifically, his plan would impose a corporate tax hike to 25 or 28 percent, which would be primarily borne by workers through lower wages and fewer jobs. His plan would also implement a second death tax through the repeal of step-up in basis, which would disproportionately fall on family-owned businesses, many of which are asset rich, but cash poor. The plan includes a doubling of the capital gains rate, which would harm investment and growth. Finally, the administration is pushing to impose a global minimum tax at 21 percent, which would make the United States uncompetitive and lead to inversions and foreign acquisitions.  

This isn't an isolated finding. Polling conducted by HarrisX found that voters believe we should not raise taxes coming out of a pandemic by an overwhelming 80 to 20 margin. 

These findings should be instructive to lawmakers as President Biden pushes trillions of dollars in new taxes, even as voters would prefer the administration’s plan be paid for through spending cuts.

In a 2008 CNBC interview with Maria Bartiromo, President Barack Obama rejected raising the capital gains tax rate to “confiscatory rates” which he defined as above 28 percent:

“Here's my belief, that we can't go back to some of the, you know, confiscatory rates that existed in the past that distorted sound economics. And I certainly would not go above what existed under Bill Clinton, which was the 28 percent… My guess would be it would be significantly lower than that." 

This should be instructive given, President Joe Biden soon plans to propose doubling the capital gains tax rate, according to Bloomberg reporters. Biden's plan would raise the capital gains tax rate to 39.6 percent which, coupled with the existing Obamacare surtax on investment income, means that federal tax rates for investors could be as high as 43.4 percent.  

In 2012, Vice President Biden and President Obama raised the capital gains tax rate rise to 20 percent.

Biden and Obama then piled on another 3.8 percent capital gains tax hike -- the Net Investment Income Tax -- one of the many tax increases in Obamacare. The 3.8 percent tax hike took effect Jan. 1, 2013, purposefully timed to kick in *after* the 2012 election. In his 2015 budget proposal, President Obama called for raising the capital gains tax to 28 percent.

Despite his support for higher capital gains taxes, Obama realized the economic damage the tax could cause.  

On the other hand, Joe Biden wants to raise the capital gains tax to 43.4 percent, which would be the highest rate since 1977 when Jimmy Carter was  President and the top rate was 39.875 percent. 

Inclusive of state taxes and the 3.8 percent Obamacare tax, Californians would face a capital gains rate of 56.7 percent, New Yorkers would face a capital gains rate of 52.2 percent, New Jerseyans would face a capital gains tax rate of 54.14 percent.

Today, Sen. Bernie Sanders (I-Vt.) and Rep. Pramila Jayapal (D-Wash.) introduced a bill which would impose a $2.4 trillion financial transaction tax (FTT), harming retirees and savers and restricting economic growth. This is just one of many taxes progressives have proposed. 

This tax would be used to fund tuition-free community college and tuition-free, debt-free public college for families earning under $125,000 a year. The FTT would impose a 0.5% tax on all stock trades, a 0.1% fee on bonds, and a 0.005% fee on derivatives. According to Sanders' press release, the tax would raise up to $2.4 trillion over the next decade.

Most FTT proposals prior to this would have imposed a 0.1% tax on all stock trades, making this a particularly radical proposition. 

An FTT will harm American retirees and savers including those that have their investments in 401(k)s, pensions, and index funds. While the Left claims this tax will make wealthy hedge funds pay “their fair share,” the FTT is really a tax on American savers and investors, including the 53 percent of American households that own stock and the 80 to 100 million Americans that have a 401(k). 

This tax will fall especially hard on public sector pensions including those used by teachers, firefighters, and police officers rely that rely on hedge funds for retirement security. In fact, an FTT would cost pension funds billions of dollars every year, leading to fewer savings, less retirement income for retirees, and underfunded pensions. 

Further, a study by BlackRock found that a financial transaction tax of 0.1 percent would result in an investor losing $2,300 in returns on a $10,000 investment in a global equity fund over ten years. Keep in mind, Sanders’ proposed FTT would cause even more harm, as his proposed rate is 0.5 percent. 

It would also cut deeply into retirement accounts. A 2021 study conducted by the Modern Markets Initiative found a financial transaction tax from 0.02 to 0.5 percent would cost $45,000 to $65,000 over the lifetime of a 401(k) account. 

FTTs have a history of failure. In 1984, Sweden imposed a financial transaction tax, a proposal that lasted just six years. Even though investors were restricted in moving capital to foreign markets, most trading migrated to London to avoid the tax. Not only did this mean the FTT raised little revenue, but capital gains tax revenue dropped because of a reduction in sales. When it was abolished in 1990, investment began to return to Sweden.  

In fact, several countries have experienced the same FTT process: an FTT is made law, the tax is reduced, the tax is finally eliminated. According to the Center for Capital Markets, this has happened in Spain (1988), Netherlands (1990), Germany (1991), Norway (1993), Portugal (1996), Italy (1998), Denmark (1999), Japan (1999), Austria (2000), and France (2008). It was even repealed here in the United States in 1965 through a bipartisan vote, due to its failure. In the years following the repeal, trading volume in the United States increased substantially.   

An FTT does not raise the revenue supporters claim it does. The Congressional Budget Office found that imposing a FTT in the U.S. would “decrease the volume of transactions” and “probably reduce output and employment.” Some have predicted that a financial transactions tax would raise little, if any, net revenue because of these negative impacts.   

FTTs also cause capital to flee to jurisdictions that do not tax transactions, further reducing revenues. When Italy and France imposed FTTs in 2012, both countries raised less than a quarter of expected revenues.    

As reported in Politico, Congressman Gregory Meeks (D-NY) recently argued that an FTT “hurts New Yoek in a big way” because it would cause trading to leave the State.

Similarly, Rep. Bill Foster (D-Ill.) argued that an FTT would reduce trading volumes and fail to raise revenue. He said:  

“My suspicion is that when you would actually score something like that, you'd look at the drop in trading volume that would happen and you'd find that the revenue raised would be small.” 

His suspicion is correct. The tax simply would not raise the revenue supporters claim it would. This is because it would reduce the volume of transactions, output, and employment.

Voters opposes a financial transaction tax by a margin of three-to-one. The U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness conducted a national poll of 2,000 likely voters. According to this data, 63 percent of voters opposed an FTT including 49 percent of voters that were “strongly opposed.” Just 23 percent of voters supported an FTT.

Americans for Tax Reform, along with a coalition of 30 conservative and free market organizations, released a letter opposed to an FTT, urging all members of Congress to reject any proposal to implement this tax. As the signatories note, the FTT is the latest attempt by the Left to take advantage of a “crisis” to implement a massive new tax on the American people. Contrary to their rhetoric, this tax would be borne by the American people, not Wall Street. 

Additionally, Republicans on the House Financial Services Committee, led by Ranking Member Patrick McHenry (R-NC), released a resolution condemning attempts to impose this new tax. As Rep. McHenry noted, this tax would harm Americans saving for retirement, cost jobs, and reduce access to new capital.  

A $2.4 trillion financial transactions tax would punish investment, leading to market volatility and a reduction in output and employment. This proposal would certainly hurt our recovery coming out of the pandemic.