Commentary

The Prying Eyes of Government Never Stop

This just came in from our friends at FreedomWorks: Apparently a buried clause in the Congressional housing bailout bill calls on the nation’s payment systems to report the details of all electronic transactions to the federal government. The clause seems especially targeted at online transactions. The goal, naturally, seems to be more tax revenue, even though current law requires merchants to report income from all sales. Of course, a certain amount of tax dollars get away, but so do the cash proceeds of your average garage sale. So in order to satiate its appetite for tax revenue, and its curiousity about what private citizens are doing with their money, the U.S. government wants America’s credit card companies and small businesses to bear the cost of assembling a giant database of sales transactions complete with names, addresses, credit card numbers and social security numbers. That distant whirring you hear are the Russian mafia’s PCs gearing up for a hack to end all hacks. Here’s a statement from FreedomWorks Chairman Dick Armey “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.” “Privacy groups like the Center for Democracy and Technology and small business organizations like the NFIB sharply criticized this idea when it first appeared earlier this year. What is the federal government’s purpose with this kind of detailed data? How will this database be secured, and who will have access? Many small proprietors use their Social Security number as their tax ID. How will their privacy be protected? What compliance costs will this impose on businesses? Why is Sen. Chris Dodd putting this provision in a housing bailout bill? The bill also includes the creation of a new national fingerprint registry for mortgage brokers. “At a time when concerns about both identity theft and government spying are paramount, Congress wants to create a new honey pot of private data that includes Social Security numbers. This bill reduces privacy across America’s payment processing systems and treats every American small business or eBay power seller like a criminal on parole by requiring an unprecedented level of reporting to the federal government. This outrageous idea is another reason to delay the housing bailout legislation so that Senators and the public at large have time to examine its full implications.”

Steven Titch served as a policy analyst at Reason Foundation from 2004 to 2013.

Titch's work primarily focused on telecommunications, the Internet and new media. He is a former managing editor of InfoTech & Telecom News (IT&T News) published by the Heartland Institute. His columns have appeared in Investor's Business Daily, Total Telecom, and America's Network, among others.

Prior to joining Reason in 2004, Titch covered the telecommunications industry as a journalist for more than two decades. Titch was director of editorial projects for Data Communications magazine where he directed content development for supplemental publications and special projects. He has also held the positions of editorial director of Telephony, editor of Global Telephony magazine, Midwest bureau chief of CommunicationsWeek, and associate editor-communications at Electronic News.

Outside of the telecom industry, Titch conducted rich media and content development for publishers and corporate marketing groups. He has also developed and launched his own web-based media, including SecuritySquared.com, an on-line resource for the security industry.

Titch graduated cum laude from Syracuse University with a dual degree in journalism and English.