The Proposal to Have Banks and Other Savings Institutions Report All Transactions Over $600 to the Treasury Department
Such a law would constitute a massive invasion of privacy. It would eviscerate the Fourth Amendment by stripping away our right “to be secure ... against unreasonable searches.” The progressive/socialist central planners want a permanent, open-ended search warrant against millions of innocent Americans.One irony of such grotesque overreach is that the resulting flood of information flowing to federal officials might actually impair law enforcement’s efforts to detect criminal activity. Recall that after 9/11, we learned that U.S. intelligence had obtained information that could have prevented those attacks, but those vital bits of information got lost in the oceans of irrelevant intelligence that had been gathered.
Question: Upon whom would the costs of administering this rule fall? Answer: On financial institutions that already bear the costs of acting as unpaid gatherers of tax-related information for the IRS. These additional costs could sink smaller banks and credit unions. Your local neighborhood bank might not survive such onerous reporting requirements, and depositors like you and me might end up having our accounts transferred to megabanks monitoring our every financial move.
The Proposal to Tax Unrealized Capital Gains
Progressives have proposed a new type of tax: an annual levy on saved wealth in addition to the current tax on income. Currently, if an investment (whether in stocks, businesses, or land, houses, and other forms of real property) appreciates in value, the owner owes tax on the capital gain only when he or she sells the asset. But progressives don’t want to wait for owners to sell their properties. They want to tax assets every year, based on how much a property has increased in value each year.This is highly problematic. In the case of real property or business assets or any asset that—unlike the stock market—doesn’t have an identifiable market value on a given day, the “gain” on which the asset-holder would be taxed would involve guesswork, injecting an element of arbitrariness. Worse, what would be taxed would be potential gains, not real ones. Until an owner actually sells an asset, one can’t accurately determine if there is a capital gain or loss.
Market value rises and falls. (Remember 2008?) Say a person’s retirement account has an accumulated cost basis of $600,000. Today, its market value is $1 million. Should the government tax a percentage of the $400,000 paper gain? But what if the stock market subsequently crashes and the account’s market value falls to $350,000, at which point the stressed investor throws in the towel and sells? The actual loss would be $50,000. Yet under a wealth tax, the investor might have paid thousands of dollars in taxes on gains that were never realized, but existed only on paper. Would the government refund the tax revenues that it had collected from temporary paper gains that turned out to be actual losses?
Another major defect of the wealth tax is that (as proposed, at least) it doesn’t index gains to inflation. Thus, it taxes phantom gains by using nominal prices, rather than real, inflation-adjusted prices.
The FBI Keeping a Database on Parents Who Protest Against Obnoxious Local School Policies
Biden’s attorney general, Merrick Garland, has directed the FBI (pdf) to investigate and prepare to prosecute parents who protest the use of critical race theory (CRT) curriculums in public schools too vehemently. Ostensibly, the objective is to police violence against school board members, public-school administrators, and teachers. The risk is that the federal government potentially may criminalize righteous anger and First Amendment-protected vehement speech.The above are three ways in which the federal government is increasing its surveillance and control over the American people. Is this Big Brother or is that too paranoid? What do you think?