First off, don't panic. The first hit on googling it is a factcheck by USA today, which claims that such a thing is at the moment a proposal by the treasury department. Making it law would require congress. Which, in case you haven't noticed, is in a bit of a contentious mood at the moment.
So now that we've been calmed, let's ask ourselves: why would the treasury want to implement this?
I'm gonna TRY not to go all Swanson on you here.
Frankly, the last thing I need to do is encourage the fucking Libertarians any more than I already do.
But the bottom line is that governments do need a certain amount of funding in order to function. They don't produce anything as such, so every dollar a government confiscates, I mean earns, has to be collected from somewhere.
Yeah, yeah, yeah, government does provide services. The extent to which services it should do is yet another argument.
("Taxation is theft!" "Shut the fuck up. You're scaring the Commies.")
SO lately, the gov's been doing a lot and wants to do more. And borrowing has gotten extensive enough to be noticed.
Tax the rich?
BWAHAHAHAHAHA!
Moral issues (and yet another argument) aside, the IRS has already pointed out that they don't have the resources to really try even if they had the legal power to do so. More and better lawyers and accountants will go work for the superrich rather than the government. Every law that does get passed gets by bypassed by people on the payroll smarter than those who wrote it (and don't have to pass a bipartisan committee to make it happen.)
And the congresscritters will cheerfully say they want to, but they know damn well that any law they make that affects a 1%er their constituents want to soak and/or eat will also affect a 1%er that donated heavily to their campaign.
Sometimes, they're even different people.
So IRS auditing power has been focused on relatively small fish for some time now. 1099 workers and people with big shifts in income year-to-year have been reliable targets for audits, but three new categories have come up in recent years.
The first is cryptocurrency.
Also an argument I'm not going to take on here. It's out there, it's new, the taxman wants a piece of it, full stop.
The second is boomer pensions.
10,000 Baby Boomers hit retirement age every single day.
About one in four of them have a private pension, held by an employer, union, or other entity.
Net worth of the Baby Boomers is somewhere around $35 Trillion.
Unlike social security, which is a cash cow the feds milked until only air came out of the tit years ago, that pension money's still out there. And the Feds getting their greasy mitts on it for their own ends, I mean equitable redistribution, is only a new law or two away.
The third is online transactions.
Technically, reporting all income included garage sales. The taxman just didn't have the time or energy to track you down for the weekend you spent making fifty bucks getting rid of your crap months ago.
But that was before ebay and etsy and poshmark and their ilk let anyone set up a stall 24/7.
Or the gig economy made exponential numbers of 1099 users possible.
Not to mention the online whip-rounds of crowdfunding that have saved many an impoverished one from falling even harder. The taxman wants his share of that as well.
What all of these have in common is that the IRS has to see it before it can audit it.
Crpyto may be hidden, but sooner or later it needs to either be used for a good or service or converted into a physical currency, either of which requires a financial service.
Pensions have to use those services as well, whether they use paper checks or direct deposit.
And there's only a handful of payment processors on either end electronically.
$600 is a monthly rent if you live way out in the sticks. That much going through annually makes a fish big enough to track.
Hence, making the financial service providers (of which there are relatively few) report them all.
So now the IRS can cast their nets into a much bigger part of the sea.
Not to catch the big fish.
But all the legal catches that thought they were too small to notice.
Again, only a proposal. No law behind it at all.
For now.
Take care of yourselves out there.
So now that we've been calmed, let's ask ourselves: why would the treasury want to implement this?
I'm gonna TRY not to go all Swanson on you here.
Frankly, the last thing I need to do is encourage the fucking Libertarians any more than I already do.
But the bottom line is that governments do need a certain amount of funding in order to function. They don't produce anything as such, so every dollar a government confiscates, I mean earns, has to be collected from somewhere.
Yeah, yeah, yeah, government does provide services. The extent to which services it should do is yet another argument.
("Taxation is theft!" "Shut the fuck up. You're scaring the Commies.")
SO lately, the gov's been doing a lot and wants to do more. And borrowing has gotten extensive enough to be noticed.
Tax the rich?
BWAHAHAHAHAHA!
Moral issues (and yet another argument) aside, the IRS has already pointed out that they don't have the resources to really try even if they had the legal power to do so. More and better lawyers and accountants will go work for the superrich rather than the government. Every law that does get passed gets by bypassed by people on the payroll smarter than those who wrote it (and don't have to pass a bipartisan committee to make it happen.)
And the congresscritters will cheerfully say they want to, but they know damn well that any law they make that affects a 1%er their constituents want to soak and/or eat will also affect a 1%er that donated heavily to their campaign.
Sometimes, they're even different people.
So IRS auditing power has been focused on relatively small fish for some time now. 1099 workers and people with big shifts in income year-to-year have been reliable targets for audits, but three new categories have come up in recent years.
The first is cryptocurrency.
Also an argument I'm not going to take on here. It's out there, it's new, the taxman wants a piece of it, full stop.
The second is boomer pensions.
10,000 Baby Boomers hit retirement age every single day.
About one in four of them have a private pension, held by an employer, union, or other entity.
Net worth of the Baby Boomers is somewhere around $35 Trillion.
Unlike social security, which is a cash cow the feds milked until only air came out of the tit years ago, that pension money's still out there. And the Feds getting their greasy mitts on it for their own ends, I mean equitable redistribution, is only a new law or two away.
The third is online transactions.
Technically, reporting all income included garage sales. The taxman just didn't have the time or energy to track you down for the weekend you spent making fifty bucks getting rid of your crap months ago.
But that was before ebay and etsy and poshmark and their ilk let anyone set up a stall 24/7.
Or the gig economy made exponential numbers of 1099 users possible.
Not to mention the online whip-rounds of crowdfunding that have saved many an impoverished one from falling even harder. The taxman wants his share of that as well.
What all of these have in common is that the IRS has to see it before it can audit it.
Crpyto may be hidden, but sooner or later it needs to either be used for a good or service or converted into a physical currency, either of which requires a financial service.
Pensions have to use those services as well, whether they use paper checks or direct deposit.
And there's only a handful of payment processors on either end electronically.
$600 is a monthly rent if you live way out in the sticks. That much going through annually makes a fish big enough to track.
Hence, making the financial service providers (of which there are relatively few) report them all.
So now the IRS can cast their nets into a much bigger part of the sea.
Not to catch the big fish.
But all the legal catches that thought they were too small to notice.
Again, only a proposal. No law behind it at all.
For now.
Take care of yourselves out there.
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