The rhetoric is all about coming for the rich, but the policies themselves look to be making the private sector an extension of government enforcement.
September 20, 2021
By: Bobby Casey, Managing Director GWP
And provided the name of the new law sounds virtuous, people will rally behind it. The more obvious example of this being: The Patriot Act.
If you go through President Biden’s Facebook feed, you’ll see all sorts of short posts talking about caring for the middle and working class; how it’s time to give them a tax break and tax the wealthy making over $400,000 per year.
Here’s the thing though: he has no intention of getting off the backs of those who are just trying to make ends meet.
It sounds noble, but he’s certainly not the first politician to placate to the middle class to get their buy-in. Joe Biden had decades in the US congress to do something about the tax code and never lifted a finger, so this hits a little more disingenuous coming from his administration.
An intense domestic form of the Foreign Account Tax Compliance Act (FATCA) might’ve just been passed by the Biden Administration. As many of you know, FATCA basically obliged offshore banks to turn over banking records of Americans who use their banks, to ensure they are properly reporting their earnings.
There are two different laws at play here, both of which are taking aim at the working class: more specifically, the side-hustle class.
Let me start by saying, the magic number is $600. Do not ask me how that came to be because I don’t think even the authors of these bills know.
First is the “American Families Plan“. Tell me that doesn’t sound benevolent. This is the one that has every financial institution turning over their transaction records to the IRS if your account holds more than $600.
Under the proposed legislation, “[f]inancial institutions would report data on financial accounts in an information return. The annual return will report gross inflows and outflows with a breakdown for physical cash, transactions with a foreign account, and transfers to and from another account with the same owner. This requirement would apply to all business and personal accounts from financial institutions, including bank, loan, and investment accounts, with the exception of accounts below a low de minimis gross flow threshold of $600 or fair market value of $600.”
I have no idea what sort of burden that places on the smaller banks and credit unions. Reporting gross inflows and outflows, with a breakdown for physical cash, transactions with a foreign account, and transfers to and from another account with the same owner? That’s insane!
Next, there’s Biden’s “Rescue Plan” which was part of his stimulus spending. I mean, what kind of jerk would oppose something called a Rescue Plan? This one requires gig platforms to report on anyone who makes more than $600 per year. So if you’re accepting payments via PayPal, Zelle, Venmo, CashApp, and even Ebay and you bring in more than $600 in the year, expect to receive a 1099K form.
To put that into perspective, prior to this law, the threshold was $20,000 total sales AND 200 or more transactions. Now its $600 total sales and NO minimum transactions.
This seems like an awful lot of effort toward the working class who are just hustling and trying to make a living. All the talk is about “eating the rich” and making them “pay their fair share”, but the laws themselves seem to be about sticking it to the working class.
But I think this is part of a larger scheme. One that is rooted in much more than simply tax compliance. This is about pitting private citizens and entities against one another by using them as enforcers for the state.
This goes beyond the bromides about “divide and conquer”. It’s about the Woodrow Wilson era being relived. Or to put it into more contemporary terms, China’s social credit system:
Part of the system is a neighbor watch program that’s being piloted across the country where designated watchers are paid to record people’s behaviors that factor into their social credit score.
Check out the list of ways in which the private sector is lassoed into being extensions of enforcement:
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Banks reporting on their account holders’ activities and assets.
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Payment apps reporting on their users.
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Gig platforms reporting on their contractors.
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Regardless of where you stand on the issue, Texas using private citizens to report on abortion activities.
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Relying on private businesses and their employees to enforce vaccine and mask mandates.
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Looking to Big Tech to censor their platforms, and provide a backdoor into the data.
If you like the policy, perhaps its easier to turn a blind eye to how it works or who it affects. The reality is, different people and institutions are being deputized to turn on their own customers.
Privacy policies are meaningless. It’s fine that your data is protected from me, but your data isn’t protected from law enforcement which skips the requirements of getting a warrant or any sort of due process.
The latest example is WhatsApp. Facebook owns WhatsApp, and they hired 1,000 employees to read messages sent on WhatsApp, and report the “inappropriate” ones to the Department of Justice.
Propublica exposed another metadata grab by the government, and Facebook Inc.’s willing cooperation in that effort. There’s quite a bit of metadata that can be shared, that isn’t part of their encrypted cache.
WhatsApp has for years downplayed how much unencrypted information it shares with law enforcement, largely limiting mentions of the practice to boilerplate language buried deep in its terms of service. It does not routinely keep permanent logs of who users are communicating with and how often, but company officials confirmed they do turn on such tracking at their own discretion — even for internal Facebook leak investigations — or in response to law enforcement requests.
The NSA was outed as illegally sharing Americans’ metadata by Edward Snowden. It was wrong when the NSA did it. It’s wrong when a corporation colludes with tech companies to do it.
This is the larger scheme. Turning private individuals and institutions against one another in a cancel culture juiced up on steroids. With more than just government agents doing the work, and tapping the bandwidth of the private sector, we are in for a terrible time.
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