While inflation continues to severely impact the financial security of Americans, the IRS has warned business owners that they are legally obligated to report financial transactions of over $600 made through payment facilitators such as Venmo, CashApp, and PayPal.
In the face of food insecurity, rising costs, and hiking tuition, the U.S. government chose to act on its desire to control money further. This is nothing new: with its stronghold over money-printing via the Federal Reserve, the actions of the state have devalued the dollar by 97 percent since 1913.
The Federal Reserve has decimated the purchasing power of average Americans. And to this day, the hidden tax of inflation causes hardships for workers, families, and small businesses, while those responsible do not face the same burden.
Financial surveillance: a massive search without a warrant
The requirement to report business transactions of over $600 was originally passed through a provision included in the American Rescue Plan Act of 2021. This followed a Biden Administration proposition to impose a similar regulation on all bank transactions greater than $600 — a policy that received widespread criticism.
Former Kansas City Fed president Thomas Hoenig deemed it “a massive search without a search warrant.” Even though congressional Democrats raised the threshold of the original policy to avoid further criticism, Hoenig’s statement is still true today regarding the payment service policy. State actors did not abandon the idea. They instead opted to implement one part of their agenda; in doing so, they are still advancing infringements on liberty.
Invading privacy to maintain control
For those who are unsure as to why the government would commit yet another invasion of privacy, the incentive for it lies in the state’s use of economic planning to maintain control. Government power in the economy makes it easier to restrain the actions of individuals.
Without fortifying its ability to collect increasing amounts of revenue from business owners, market forces would inevitably hurt the ability of the government to regulate industries. That’s why it shouldn’t come as a surprise that earlier this year, the federal government passed an $80 billion increase in funding for the IRS over ten years.
The government relinquishing its authority to individuals would allow for decentralized decision-making, competition, and lower costs, bringing about financial prosperity. The existence of the Federal Reserve is antithetical to this. Still, it does not serve to advance liberty if we simply wait for the federal government to repeal its harmful actions.
Decentralization enables individual sovereignty
Knowing that the central banking system derives its power from the government, libertarians would be wise to promote a decentralized solution that is not enacted via policy. Cryptocurrencies like Bitcoin offer the answer here. The widespread adoption of such technology would undermine centralized economic control and thus diminish the ramifications of inflation and unnatural adjustments to interest rates.
The viability of crypto should also make libertarians optimistic, as getting more people to use it is a matter of convincing them that it safeguards their finances. The message is simple: the users are the ones with the power to determine worth. Those who practice sovereignty in their transactions, whether they are mindful of it or not, contribute to a freer society.
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This piece solely expresses the opinion of the author and not necessarily the organization as a whole. Students For Liberty is committed to facilitating a broad dialogue for liberty, representing a variety of opinions.