A group of House Democrats on Wednesday called for a tax reporting proposal included in the Build Back Better Act to be scrapped, citing concerns over privacy.
“Americans expect their bank or credit union to safeguard their financial information,” the Democrats wrote in a letter addressed to House Speaker Nancy Pelosi and Ways and Means Chair Richard Neal. “This proposal would erode trust in financial services providers.”
The provision, introduced as a way to partially fund the Build Back Better Act, would require banks to disclose to the Internal Revenue Service (IRS) the inflows and outflows of accounts containing over $10,000. The proposal was initially much broader in scope, applying to accounts containing over $600, but was amended following bipartisan opposition.
The Democrats cited opposition to the proposal from their constituents as a reason for opposing the provision and declared that only a full withdrawal of the proposal from the bill would be satisfactory.
“Over the past few weeks, hundreds of thousands of constituents have reached out to our offices voicing concerns and opposition to allowing the IRS to collect this data,” the Democrats wrote. “We have also heard from a wide range of constituent companies and small businesses about the significant burden and potential unintended consequences that could result from the new reporting regime.”
Democratic Sen. Joe Manchin of West Virginia also voiced concerns over the proposal, telling reporters he didn’t expect the provision to be included in the final draft of the bill. Manchin’s opposition could sink the provision in a 50-50 Senate.
The letter was led by Rep. Cindy Axne of Iowa, who was joined by 20 other Democrats.
“While I certainly think we need to be looking at ways to crack down on wealthy tax dodgers, I oppose implementing something that could up scoop up information on middle-class Iowa families and create massive amounts of red tape for our small community banks and lenders,” Axne said in a press release. “We need to ensure the top 1% are paying their taxes, but this proposal goes too far.”
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