The budget reconciliation bill passed Friday by the U.S. House of Representatives does not include the controversial proposal to have banks and credit unions report account information to help fund the programs supported by the bill.
The reporting proposal, which would have required financial institutions to report the total amounts flowing into and out of bank accounts, was expected to raise revenue for the Biden administration’s social and climate agenda by helping the IRS identify high-net-worth individuals with sources of income not currently taxed.
But the proposal faced opposition, including from banking trade groups. After congressional Democrats tweaked the proposal to limit which taxpayers would be subject to financial reporting, opponents continued to campaign against the plan, and Democrats removed it from negotiations about the bill late last month.
The Independent Community Bankers of America helped lead opposition to the proposal. In a statement Friday, ICBA President and CEO Rebeca Romero Rainey said the trade group would continue to oppose the policy as negotiations move to the Senate.
“The omission of the IRS plan from the House bill demonstrates the impact community banks and consumers nationwide are having on the debate via ICBA’s months-long #KeepMyBankingPrivate campaign,” Romero Rainey said. “Keeping the IRS proposal out of the Senate version and any final package will avoid privacy, due process, and data security concerns that have prompted hundreds of thousands of consumer messages to policymakers in opposition.”
Despite the omission of financial reporting, the Biden administration still expects increased tax revenue to fund the programs authorized by the bill, known as the Build Back Better Act. Treasury Secretary Janet Yellen referred to the bill in a statement on Friday as a “fiscally responsible package.”
“This bill is more than fully paid for by asking large corporations and the country’s top earners to pay their fair share and by finally ensuring high-income tax evaders pay what they owe,” Yellen said.
