Bill Overview
Title: Prohibiting IRS Financial Surveillance Act
Description: This bill prohibits the Department of the Treasury from requiring a financial institution to report the balances, transactions, or the transfers into and out of a financial account. This prohibition does not apply to laws or regulations in effect on the date of enactment.
Sponsors: Sen. Scott, Tim [R-SC]
Target Audience
Population: Individuals with financial accounts
Estimated Size: 300000000
- The bill is directed towards the IRS's ability to require financial institutions to report their clients' financial details to the Treasury.
- Financial account holders who are subject to financial surveillance for tax compliance will directly be affected.
- All US citizens with financial accounts that could have previously been monitored for IRS compliance may see a change in reporting requirements.
- Globally, individuals who hold accounts in U.S. financial institutions will observe these changes, particularly if they are affected by bilateral agreements for tax compliance, like FATCA.
Reasoning
- The population targeted by this policy includes nearly all U.S. adults who have financial accounts, encompassing around 300 million people. Most adults interact with banks in some form, whether through savings, checking accounts, or credit facilities.
- The policy budget is substantial, but given the vast population size affected, individual per-capita impact in terms of government spending will be minimal.
- The policy change mainly impacts the reporting burden on financial institutions and may alter the privacy dynamics for account holders. Thus, individuals' perception of well-being might fluctuate based on their sensitivity to privacy and government oversight.
- A diverse set of perspectives has been selected to reflect the spectrum of opinions likely found within the target population regarding government surveillance and financial privacy.
- The interviews also capture varied levels of understanding and direct experience on how Treasury reporting impacts their daily financial activities.
Simulated Interviews
Marketing Analyst (New York, NY)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I value my financial privacy, and I think reducing IRS surveillance is positive.
- However, I'm concerned about tax evasion that might go unnoticed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Small Business Owner (Dallas, TX)
Age: 52 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Less intrusive IRS surveillance is beneficial for my peace of mind, especially after the audit.
- I am wary of fraudulent activities increasing as a result, however.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Software Engineer (Los Angeles, CA)
Age: 37 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I feel a sense of relief knowing my financial transactions won't be over-scrutinized.
- There's a risk that without data, tax avoidance might rise.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 5 |
Retired (Chicago, IL)
Age: 65 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I'm concerned about how this change might impact broader fiscal responsibility.
- Less IRS oversight could lead to loopholes for tax evaders.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Student (Seattle, WA)
Age: 22 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- I don't fully understand the implications but it seems better not to have everything watched.
- It might make tax more complicated for people really wealthy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Accountant (Atlanta, GA)
Age: 44 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This will reduce the administrative burden for compliance, but might obscure necessary fiscal scrutiny.
- Could create challenges in managing transparent and ethical tax practices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Freelancer (Miami, FL)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- I think this could ease my anxiety around financial reporting.
- But I wonder if it won't benefit those already avoiding taxes more than people like me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Public School Teacher (Boston, MA)
Age: 47 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I think financial transparency is important, so I'm hesitant about reducing checks.
- Could see issues if it leads to less accountability for major earners.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Construction Worker (Phoenix, AZ)
Age: 59 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- I'm for any policy that keeps government from peeking over my finances.
- Don't like taxes being more easily dodged though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Tech Entrepreneur (San Francisco, CA)
Age: 33 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- This will make the financial operations less cumbersome, but there could be a downside if it complicates international compliance agreements.
- Could benefit my business operations by reducing bogged down reporting.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $500000000 (Low: $300000000, High: $700000000)
Year 2: $500000000 (Low: $300000000, High: $700000000)
Year 3: $500000000 (Low: $300000000, High: $700000000)
Year 5: $500000000 (Low: $300000000, High: $700000000)
Year 10: $500000000 (Low: $300000000, High: $700000000)
Year 100: $500000000 (Low: $300000000, High: $700000000)
Key Considerations
- The impact on IRS's capability for enforcing tax laws.
- Financial institutions may perceive reduced compliance costs.
- Uncertain effects on voluntary tax compliance by individuals.