Washington Lawmakers Reportedly Still Considering A Transaction Tax

President Joe Biden and Democrats in the U.S. House and Senate continued to work last week to reach a consensus on the tax portions of their $3.5 trillion budget reconciliation bill. One provision that lawmakers continue to explore — and that MSCI strongly opposes — is requiring banks to report financial transactions to the Internal Revenue Service.

As Connecting the Dots has reported, lawmakers initially were considering financial institutions to report all transactions greater than $600. Democrats are now reconsidering and reportedly are discussing exemptions for some common transactions, including payroll transactions, and a higher threshold at which the rules would kick in. While no proposal has been formally released, news reports have indicated that threshold could fall around $10,000.

Last month, MSCI joined the Independent Community Bankers of America (ICBA) and several other business trade associations to send a letter to House and Senate leaders expressing opposition to a transaction tax. The letter, available here, said, “Indiscriminate, blanket data collection would amount to a troubling effort to profile American taxpayers based on account characteristics without grounds for suspicion of tax evasion. Such profiling is inappropriate in all law enforcement contexts.”

The ICBA, which represents small financial institutions around the United States, is asking small business owners to make their voices heard in opposition to the proposed IRS requirement. If MSCI members oppose this idea, they can use ICBA’s online tool to send a letter to their member of Congress.