The federal government has always required large personal bank transactions to be reported, just in case. I remember that number being $10,000… Somewhere along the way, it was increased to $20,000. With inflation, that makes sense.
Why the requirement? Because large cash transactions might be an indicator for black market activity, such as drug dealing, contract hits, political bribery, etc.
Americans have a healthy distrust of government. We don’t want every personal transaction reported to the feds, but we understand the need to report some. With inflation, we expect such numbers to be periodically revised upward.
We certainly do not expect them to be revised downward.… But that’s just what will happen if the Democrats’ tyrannical Build Back Better Act is somehow passed into law.
Along with their desire to add another 87,000 agents to the IRS, an agency already far too powerful and destructive to the American economy, the Democrats have planned for a new banking requirement: that all transactions over $600 through PayPal, Venmo, and similar banking tools, representing goods or services, must be declared to the feds, in the same way that only those $10,000 cash withdrawals always were in the past.
Have they shared a legitimate reason for this plan?
Well, yes, they have. It’s to go after the black market.
More and more Americans, to make ends meet, have found themselves needing to operate or utilize side businesses, as handymen, plumbers, electricians, crafters, carpenters, etc.
If you pay your plumber $100 in cash, that withdrawal still won’t be reported. For now. But for a bigger job, of $600 or more, paid through Venmo or PayPal, the feds will know about it as soon as the transaction clears.
Or if it’s a cash withdrawal from your ATM or your bank teller, and you paid him in cash, then they won’t know what you did with the money, right away… They will only know that you did something. Something that they are now redefining for the first time as suspicious. So, now you are on a list for follow-up.
The government knows that there are a lot of reasons to take out cash.
Maybe you’re giving a hundred bucks each to your kids for Christmas. Maybe you’re taking the family to Six Flags or the Renaissance Faire, or to the state fairgrounds for State Fair.
Maybe you’re taking the kids for a weekend vacation, and some of the things you do, like craft fairs and snack kiosks and roadside stands and art fairs, are more comfortable with cash then with charge cards or checks.
That should be your choice, not the government's.
You shouldn’t fear using cash instead of credit, just because the government is more obnoxious when you use one than they are when you use the other. It should be your choice.
There are powerful forces in support of this kind of government crackdown.
The union mechanics want you to take your car to their dealerships, and not use the local mechanic working out of his own garage.
The union plumbers want you to call the local plumbing company, rather than hire your neighbor or friend or brother-in-law to do the small jobs you need done, for which they charge double or triple.
And brick and mortar businesses may favor this as well, because they only see as far as the competition from the workmen who work from their homes. They assume they will benefit from this crackdown, because we will be forced to hire the brick and mortar business, and deny the work to our friends, neighbors and family.
But this is shortsighted on their part.
The unions and businesses who support this crackdown on their casual competitors forget that they are themselves practitioners, in other aspects of their lives.
The electrician who fears his private competition forgets that he himself hired his neighbor the plumber to save his family from a disaster right before Thanksgiving dinner, when the plumbing companies in the phone book couldn’t get there for 72 hours or would have added a $500 holiday upcharge.
And that same plumber called his brother-in-law, the electrician, to install ceiling fans when he couldn’t afford a new air-conditioning system for his house.
Both of them trust each other, because they know each other… They may even know that they are both union members, professionally trained, competent and talented at their respective professions.
And because they know each other, they can trust that the work will be good, and they can afford these unexpected costs much better then the going rate from the businesses to whom the unions and the politicians are trying to push all this activity.
To be fair, both sides have a point.
Allowing people to do business on the side, possibly avoiding taxes on it, getting out of the overhead costs that the local plumbing company, electrical company, and remodeling company have to absorb and build into their pricing, is indeed a slight warping of the system. One can argue that it’s not entirely fair.
But one must also argue the opposite: That a free citizen has the right to evaluate his vendors, and decide who he trusts, whether he wants the protection of a warranty and a business' reputation, or if the trade-off for lower prices and greater flexibility, and often much greater speed, is worth it.
Personally speaking, for example, I only take my car to a legitimate automotive repair chain, for the protection of warranty service… but I have occasionally hired a credentialed electrician or plumber doing work on the side. I’m sure that most Americans have a similar mix…. And need to, because their economic circumstances simply do not allow them to pay the full prevailing wage rate for every single thing that their household requires.
Who should be favored in the tug-of-war between these admittedly competing interests?
Should we side with the private citizen, the homeowner, the individual taking care of his family, trying to stretch his meager take-home pay to provide for spouse, children and maybe in-laws as well?
Or should we side with the established business, the union shop, the brick and mortar, in their effort to avoid being undercut by the nuisance competition of their potential customers’ neighbors, friends, and relatives?
This is not an easy choice. A fair observer must recognize the legitimate claims of both sides.
But it is instructive, isn’t it, that today’s Democrats don’t debate it, don’t even bring it up publicly, but rather, sneak it into a fat bill, with the hope that it won’t even be noticed, and side 100% with the establishment side of the argument, and against the American individual.
Why might that be?
Is it because they are that concerned with the quality of the service provided? Is it because they are that controlled by the unions? Is it because they are so reflexively inclined to support big business over small, and small over individual entrepreneurs? Is it because they know that more taxes are paid by the businesses, and some of these private friends, doing work on the side, might not always declare all this work on their taxes?
The temptation of the cynic is to lean toward the latter… To assume that it is the grubby fingers of the income-tax-addicted statist that made this decision for them.
But there is another possibility.
Perhaps they want to see every transaction over $600, simply because they enjoy having the power to collect that kind of data about you. Because this data point is a foot in the door for asking further questions.
They tell us that the reporting is only needed for transactions involving goods and services. But how can they tell if it's for goods and services or not, unless they investigate you?
They tell us that the reporting is needed to ensure that there is no black market activity going on. But how can they tell, unless they investigate the transaction?
They tell us that everything they do is designed to make this a better country. But we must ask… A better country for whom?
Copyright 2021 John F Di Leo
John F Di Leo is a Chicagoland-based trade compliance trainer, transportation manager, and writer. His columns have been found in Illinois Review since 2009.
John's first book, a collection of his short stories about voting fraud originally run in Illinois Review, is available on Amazon under the title "The Tales of Little Pavel."
The first volume of his new fiction series, "Evening Soup with Basement Joe," a political satire, set in a parallel universe not quite identical to the Earth of 2021… in which a confused, crooked old man becomes president, and a young aide brings down his nightly bowl of soup and engages him in conversation, in a losing battle to restrain the onset of dementia. Volume one covers the first ninety days of this strange new world, and is also available from Amazon in either eBook or paperback!
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Excellent commentary John. I think this is one of the worst invasions or privacy and this $600 transaction should not be reported to any government agency. Thanks for bringing up the Renaissance Faire in Bristol, WI. I haven’t been in several years and they have some of the best entertainment and food of any fair, carnival or state fair I have ever been to. The pulled pork sandwiches and the barbecued turkey drumsticks are non-pareil. The bratwurst and polish sausage sandwiches were also excellent along with the marinated prime rib-eye sandwiches with marinated onions.