by Jay Kruse, Chief Advocacy Officer
Let’s keep pushing! As an advocacy first organization, we continue to advocate and push out updates on the potentially industry-altering IRS Reporting Proposal, part of the Congress’ Build Back Better Act.
Whether we like it or not, politics isn’t always for the faint of heart. As you watch the news and follow along with this issue, don’t expect the partisan vitriol coming out of either side of the political spectrum to end anytime soon. Unfortunately, this has become the norm and it may even get a little worse before it gets better as negotiations heat up on the issue this week, ahead of the preferred month-end deadline communicated by the Administration.
A bad idea? Nope, it’s much worse. This proposal is fundamentally flawed, regardless of the threshold chosen ($600 or $10,000) and would have an extremely negative impact on the financial well-being of the unbanked, underbanked, and low and moderate-income households, potentially discouraging both the wealthy and the most financially vulnerable from choosing mainstream financial services. We are already seeing the effects of this across the Dakotas.
While closing the “tax gap” for the ultra-rich is said to be the target of the proposal, once implemented, I believe we will find the exact opposite to be true. I think it’s safe to say that restaurant servers and wait staff aren’t the first people anyone thinks of when someone brings up the “ultra-rich.” Most likely, these employees who are very important to our economic recovery, would fit into the low or moderate-income categories. This would apply to any employee in any industry that relies heavily on “tip” income, which often goes unreported to the IRS. It will be virtually impossible for that “tip” income to continue to go unreported under this new IRS Reporting Proposal, which would in turn almost certainly increase the annual tax bill for many low and middle-income families across the nation. It’s just a fact that many of the tax loopholes available to the rich to help them shield their income from taxation are not an option for those in lower tax brackets.
Now is not the time to hold anything back. This is an extremely reckless proposal that would fundamentally change the way the IRS and financial institutions operate, by nearly doubling the size of the IRS and granting it access to Americans’ private financial account information for the purposes of “monitoring” your annual cash-flow activity.
The government just wants to “monitor” your banking activity? Well, what if they next want to “monitor” your cell phone activity or the number of times you visit the doctor? At what point does “monitoring” turn into “spying”? I’ll let you be the judge, but I hope you can see how that could lead us down a very slippery slope.
Keep an eye on The Memo and our social media accounts as we continue to roll out updates and show love to our Dakotas’ congressional delegation as we all do our part to kill this proposal!
Advocacy in Action! Todd Humphrey with First Community Credit Union represented DakCU over the past weekend at a Friends of Hoeven Pheasant Hunt which was sponsored by the Credit Union Legislative Action Council (CULAC), CUNA’s federal political action committee that supports Congressional candidates in their bid for office. As you can see, Todd and Senator Hoeven had a successful weekend in Emmons County harvesting some roosters and enjoying the outdoors! We can’t thank Todd enough for representing our organization at the event and helping advocate for North Dakota credit unions.
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