Electronic Transaction Reporting Slipped Into Senate Bill

StealthyRoid writes "The Senate mortgage bill proposed by Sen. Chris Dodd (who was the recipient of a sweetheart deal on his mortgage from Countrywide, one of the beneficiaries of the bill) includes an attempt to sneak into law a requirement that all electronic payment processors send detailed transaction data to the federal government. The proposed law contains an exception for businesses with fewer than 200 transactions or a total value less than $10,000. Quoting FreedomWorks chairman Dick Armey (former House majority leader) from the article: 'This is a provision with astonishing reach, and it was slipped into the bill just this week. Not only does it affect nearly every credit card transaction in America, such as Visa, MasterCard, Discover, and American Express, but the bill specifically targets payment systems like eBay's PayPal, Amazon, and Google Checkout that are used by many small online businesses. The privacy implications for America's small businesses are breathtaking.'" This is the same bill that contains a controversial provision to fingerprint all mortgage brokers.

You have nothing to fear!

There is no danger if you have nothing to hide obviously.

But just to be safe, might want to hold out on that "McCain is evil" book purchase. Just in case, you know?

Note to moderators: this entire post, barring this line, is sarcastic.

Re:You have nothing to fear!

Considering that it was slipped in by a Democrat (Dodd) and the person blowing the whistle is a Republican (Armey) you might want to warn people about not purchasing the equivalent "Obama Is Evil" book.

You know how you can tell the party affiliations on a Slashdot story? If its negative about a Republican the summary almost always mentions it. If its negative about a Democrat they usually just say "Senator" or 'Congressman" with no party affiliation.

Re:You have nothing to fear!

It isn't just Slashdot. Look back through any recent news article about a Republican who has done something illegal and/or really stupid. You're not only going to see the word 'Republican' much more often, but news stories also like ask alarmist questions like, "Is this indicative of further corruption in the Republican party?" or any other comment that will lead a reader to at least ponder widespread misconduct in the Republican party. While there isn't any true intense misconduct in this particular article, all you have to do is look back to Elliot Spitzer's demise as a real example; most news stories did not plaster the word 'Democrat' all over, let alone suggest a party-wide fallout from the scandal. Just the observations of an independent with a pretty staunch disdain for both major political parties....

Re:You have nothing to fear!

Did you read ANY of the responses to your post? If you had, and then checked up on their claims (they are correct, BTW) you would have found that the only thing painfully obvious about your post is that it was a politically motivated post couched in BDS and ignorance, intended to inflame other posters. In other words, a Troll post. You were modded properly.

Nothing personal, I'm sure you are a fine fellow, but your post came off as horribly trollish. I would recommend dumping the BDS. You'll be better off without it.

(BDS = Bush Derangement Syndrome: An Irrational fear of anything related to the George W. Bush presidency, and a tendency to blame everything wrong with the US Government, America, the World, and one's own personal life solely on G.W. Bush.)

Re:You have nothing to fear!

There is no danger if you have nothing to hide obviously.

I wish we could seriously apply this to laws. Why not create a "Scope" section for bills that specifies what the bill is about and limits its reach? Then interpret the bill such that anything outside the specified scope would be ignored.

Anything nasty trying to sneak in unnoticed would be in danger of going outside the specified scope and being ignored, but anything legitimately related to the bill would not be affected.

Congressmen often vote on bills they haven't read, but perhaps they could at least make time to review scope sections.

you're freedoms can you feel the slip?

yes what we need more govt intrusion into our daily lives sure they won't monitor transactions unless they're over $10000 for 200. but how will they cull this out after the fact? Someday we'll enjoy the freedom and privacy the Soviet Union use to have.

All the better...

... to tax you with, my dear.

Re:All the better...

... to tax you with, my dear.

Funny delivery yes, but not so funny realities. It's clearly paving the way for the federal government to track that persnickity little inter-state commerce that gives them carte blanche to do whatever they want with the country. I'm sure the twinkling in the eyes has at least some part about taking a cut, or at the very least taking a cut for the states (since congress is elected via the state, they're job is to bring home the bacon).

Won't come to pass anyway

The White House is planning on vetoing it [washingtonpost.com].

Re:Won't come to pass anyway

Hey! He still has a few months left. There is a possibility -- however slim -- that TWO good things could come from this administration!

Re:Won't come to pass anyway

The reason they will veto is is because: "In a statement, the White House strongly objected to provisions of the bill that would send $4 billion in aid to communities hard-hit by foreclosures, faulted other spending plans and changes in how regulators oversee housing programs. " It is NOT for an altruism motive.

Is this the basis for a tax?

From TFA:

A de minimis exception for transactions of $10,000 or less and 200 transactions or less applies to payments by third party settlement organizations. The proposal applies to returns for calendar years beginning after December 31, 2010. Back-up withholding provisions apply to amounts paid after December 31, 2011. This proposal is estimated to raise $9.802 billion over ten years.

The summary says that the minimum reporting is under $10K (USD) or under 200 transactions, but the article shows an and.

Aside from that nitpick, how is this supposed to "raise $9.802 billion over ten years"?

No. no. No.

I keep hearing this "sweetheart deal" thing about Chris Dodd. You know what the actual deal is? A 30 year AR mortgage intro'd at 4.5%. All that means is the man had good credit and timed his purchase well. It's not like that is out of the range for mortgage rates. When I first heard it, I was thinking a no interest mortgage or something like that. Instead, he's paying almost 5%, like the rest of us.

He did get a sweetheart deal

According to countrywide he got .5 off his rate because he was a US Senator. He knowingly accepted the VIP designation then tried to claim he thought it meant nothing? He serves and has served on various boards which have some power over this industry? Perhaps his party affiliation is saving him. I bet it is.

Read up on it, http://www.portfolio.com/news-markets/top-5/2008/06/12/Countrywide-Loan-Scandal [portfolio.com]

By lowering his rate they effectively handed him $60,000. In other words, Congressmen don't play by our rules. Their ability to regulate the industry means they intimidate without having to lift a finger. Considering his role in this bill and the fact he takes money from Countrywide for his reelection makes the whole thing stink.

and people wonder why crap like this little transaction law slips in. These guys are always slipping stuff in and out trying to avoid our knowledge of what they really do.

Dodd is a crook. He is a liar. He was simply caught and now is trying hide from it.

As a non-American, can someone explain to me...

I'm not American, but I have always been surprised about these riders... Why on earth are riders legal? A bill about picking daisies can have a rider about nuclear weapons... there's no connection, they can be introduced any time, and they always seem to be used to sneak in unfavorable laws... Why are they allowed?

Re:As a non-American, can someone explain to me...

Because Congress gets to make their own rules.

There is a mechanism for the various states to get together and amend the Constitution without the participation of the congress, but it has never been used and it is unlikely that it will ever be used.

Re:As a non-American, can someone explain to me...

Why? Because the system is seriously f'ed up! Why don't we do anything about it? Um... uh... wait - Lost is about to start!

Re:As a non-American, can someone explain to me...

The US House of Representatives has internal rules governing the germaneness of amendments (that is, amendments to bills must be on-topic). The Senate has no such rules, so lots of stuff gets introduced there.

onos, the gummint knows i sell stuff

Look kids, it's been a fun free ride and all, but if you think the government isn't gonna tax transactions once it figures out HOW to get at those transactions, well, ha ha ha. Sure. Okay.

They take the money you earn while working for a living and use it for corporate welfare and bailing out rich bastards who gamble and lose, so how long do you think they're gonna watch billions of dollars bouncing around the Interwebz before figuring out a way to dip their collective hand in there too?

As for the "freedom watch" website from TFA - you may wanna check out the rest of the site before you send any large donations.

Efforts to regulate carbon dioxide are an attempt by the global Left to gain control of the U.S. economy.

lolwut?

Re:??? WTF?

presumably to avoid tax fraud. if you are sat at home apparently out of work and claiming state benefits, but in practice have a major ebay store that brings in $80,000 a year, then the federal government would like to

1) tax you
and
2) stop paying you benefits.

How is this not fair? Like many companies, I do most of my business on-line, and have no noticeable bricks and mortar premises. If it wasn't for banks reporting to the govt what I earned, I could pretend to be earning nothing, and pay not a penny in a tax.
Am I missing something here? People really expect the govt to not be interested in small online businesses and taxing them?

How easily we give up our rights

Well, sure. The government would like to know about your every activity, from breathing, eating, voiding, spending, reading, listening, talking, pretty much everything. The better to tax you, regulate you, imprison you, coerce you.

That doesn't mean we should willing give up that right, nor does it say in the supreme law of the land where the government has been given that power.

Better to let 1 million people cheat on their taxes than 250 million give up every last vestige of privacy.

Re:??? WTF?

I do commercial tax prep for an unnamed company, and this is spot on. In 2004, the IRS testified before congress about where they thought the most major tax fraud cases were. The IRS's estimates were that a specific group of Small/Home business filers (the ones using schedule C with just a normal private citizen's 1040/1040A, and not using the commercial tax form 1041 and all the quarterly reporting forms they would have to use if they had employees) were responsible for about 100 billion in tax fraud every year.
        Second place was false filings for the Earned Income Credit, with about 9 billion a year projected loss.
        Congress directed the IRS to focus on the second case first. Some of us saw that cynically - I've heard several fellow tax pros describe it as a Republican dominated congress and executive branch, focusing on the group that doesn't vote or votes Democrat, rather than a larger group that tends to vote and contribute republican. Congress adopted a new set of tax rules that included the "Uniform Definition of a Child (UDC)" rules and told the IRS to go to town.
        Other people, perhaps more charitably, noted that going after the smaller group also tended to catch a lot of dead-beat dads, and was much, much easier to implement. Over the last three years, congress and the tax courts clarified the rules on a lot of business related deductions such as de minimus employee benefits, and cleaned up the tax code re. small business filers. Some significant cases made it through the tax courts during this interval, and my own estimate is the IRS is in a much better position to go after their #1 on their top ten list than they were, and maybe it will start happening. Whether there's a connection to which party is in power is at least debatable.

Re:??? WTF?

I don't really see the privacy angle. If you're not using cash, then a third party is already privy to the transaction, and who knows who has access to it from there. Obviously privacy isn't the buyer or seller's primary concern. It's to everyone's benefit that individuals aren't able to escape their tax obligations through their unconventional business schemes. Why would we want to pay their due?

Privacy: the whole thing of "I have nothing to hide" has really taken root. Personally I find it disturbing to use fairness envy ("I pay my fair share, so must everyone else, to the point of invading privacy") to further advances against government-enforced privacy violations. Please refer to Daniel J. Solove's excellent paper on the matter [ssrn.com]. The point of using, say, a credit card and disclosing to them your transaction is that it's your decision and they are legally bound to their privacy policy. The government has no privacy policy (other than systematically invading it at every opportunity).

Not to say it's never happened before. Terrorists, pedophiles, drug abusers... they all welcome tax evaders as the new bogeyman by which the government can shoehorn new bad laws onto the books with overreaching influence.

So am I for tax-dodgers? No: the people not paying taxes on their ebay stores are ALREADY breaking the law and can ALREADY be successfully prosecuted for it. Financial records can be obtained by subpoena and the proper procedure within the justice system. This bill would force all handlers of electronic payment to account and disclose information at THEIR expense (read: our expense because profit margins sure as hell aren't going to take the hit from government compliance costs). Now justice and investigation doesn't need a warrant or a court order because private companies are now compelled to broadcast this data.

Re:??? WTF?

As usual, the summary is pretty wrong. The "detailed transaction data" of the summary consists of "the annual gross amount of reportable transactions" according to the Senate Bill Summary as quoted in the article - the only information which is less detailed is no information whatsoever. So on the face of it this isn't the intrusion that it's being made out to be.

Re:Lets take a quick guess.

The real Chris Dodd is a Democrat, but in this case his body has obviously been taken over by those havoc-wreaking Republicans! Invasion of privacy means nothing to them! To think that they have stooped to such base levels of taking over a Democrat's body just to serve their cause!

It is best not to refer to him as a Democrat until it is proved that it is the real Chris Dodd. In fact for the time being it would probably be best to say "A man who claims to be Chris Dodd..."

Now, if it turns out that it is the real Chris Dodd, then of course we have full confidence that his motives are to further, in the best way possible, the social and environmental causes that are vital to this country's continued existence!