UPDATE 07-09-10:
(Original Story follows this update)
After further examination of the Debt Free America Act, SHTF Plan contributor Sketch rightly pointed out that the proposed legislation currently in Congress would move to eliminate the income tax as we know it today. Under Section 6 of the bill, implementation of a 1% transaction tax would repeal the income tax on individuals currently allowed under certain sections of the Internal Revenue Code of 1986.
Forgive our skepticism on this, but if this bill were to ever come to fruition, we expect it to end up similar to the watered down version of the Audit the Fed Bill which was recently passed. The passing of this bill, you’ll recall, included a last minute modification to the actual auditing of the Federal Reserve, essentially leaving the bill impotent.
At this point, we would like to see bipartisan review and spirited debate in both chambers to determine if this is a realistic proposal.
As pointed out in the comments section below, perhaps this is exactly the type of system of taxation that we should implement, especially if the income tax itself is repealed, as it would ‘punish’ spenders and ‘reward’ savers.
ORIGINAL STORY PUBLISHED 07-08-2010:
ORIGINAL STORY TITLE: “We Want More: Congress Looks to Tax ATM Withdrawals, All Financial Transactions”
We’ve written repeatedly about the debt problems faced by America today and for generations to come. We’ve also noted that when government bureaucrats overspend, the solution is always to tax the people, rather than to cut back the spending. And we predicted, like many others, that everything is fair game for the government and they will stop at nothing to get their hands on everything they can.
A recent story at Check It News directed us to an overview of a new bill introduced in the House of Representatives (H.R. 4646) that would tax every single financial transaction in the country:
One idea for raising taxes to pay down the debt is the bill introduced this February by Rep. Chaka Fattah (D-Pa.). His “Debt Free America Act†(H.R. 4646) would impose a 1 percent “transaction tax†on every financial transaction — whether paid by cash, credit card or any form of financial transfer, the only exception being transactions involving the purchase or sale of stock. Theoretically, everyone would pay one cent on the dollar for every such transaction in America every day — whether $3 million on a $300 million business acquisition, $300 on the purchase of a $30,000 car, or $5 on a $500 ATM withdrawal.
source: Lanny Davis Op-Ed
To be fair, Lanny Davis also mentioned that taxing every transaction is only part of the solution, and that cutting spending would be an important part of any strategy to pay off our national debt.
We agree that cutting spending is a great idea, and if federal, state and local governments want to eliminate debt, then this is the first step that needs to be taken.
There should be no talk of increasing taxes, even 1%, without a commitment from Congress on spending cuts first.
Given that “spending cuts” have been the talking point of every election since most of us have been alive, we’d like Congress to put that in writing, in the form of bills, essentially mandates, that will force cuts in wasteful programs and move to eliminate entitlement programs like welfare, social security, medicare, medicaid, and the newly passed Obamacare legislation.
Without a move to scale down and eliminate most of these programs, Congress could collect a 100% tax on all Americans, seize all of the wealth in the USA and we would still owe $50 trillion to our creditors over the next 30 years.
Tax increases will not work so long as our Legislative branch is populated with power hungry sociopaths who care only about their personal advancement within the political ranks of their parties.
How do these people even come up with these numbers knowing full well that our national commitment is officially $120 trillion over the next few decades? A 1% tax is going to fix that?
A 5th grader with a calculator could tell you this won’t work unless the outrageous spending is halted.
The next thing you know, they’ll want to tax us for breathing. Oh, wait. Too late. Congress will be attempting to pass this legislation, formerly known as the Cap & Trade, under a new name, the American Power Act, either this year or next, essentially taxing you for the toxic carbon dioxide you exhale.
………..screw the U.S. government………haven’t those Obama monkeys in D.C. ever heard of the term ‘black market’?   The black market in the U.S. is going to be a boom if this crap is implemented. Â
Nice try President Soetero, but we weren’t born yesterday, and unlike you, we were born in the U.S.      Â
Tax this, tax that….. I agree that I’d much rather see spending cuts, and that they are more beneficial anyway. Every tax…. gah, it doesnt make a bit of sense to me! Its not enough the people sweat and bleed for the soil they build their capitals on, but i suppose next they’ll tax the blood we bleed!
politicians are always ready to cut spending, right after they get past the current urgent spending needs. Â Just like dopers who promise to quit right after they get done shooting the extra big bag of crank they just bought.
We all know that the spending has to stop. Â The problem is that stopping the spending means cutting off old people, the sick, and the very young and poor, from benefits they are getting right now. Â It also means cutting the oil companies off the public teat they’ve been sucking dry for decades now, along with other subsidies too (corporate farming comes to mind).
Both parties are scared shitless of retaliation by their core constituencies over these cuts. Â Neither party is willing to gore their own ox, and just wants to slaughter the other guy’s animal instead. Â This is why our current governmental system is doomed. Â The Mises quote will be bourne out eventually, and all the politicians and banksters will fade away and run from justice like the nazis at the end of WWII.
In spite of the colossal damage a failed society wrecks, however, in my opinion, there are a group of citizens who might be able to start piecing things back together. Â IT’S US. Â The people who are pissed off and trying to do their small part to prepare for the future. Â Stay on it, Ladies and Gents, these are huge times we’re in here. Â As NetRanger said, “there are giants posting here!”.
3 words: black market economy. Trade, barter, trade favors and NETWORK, NETWORK, NETWORK. Govt has no right whatsoever to lay claim to a portion of all economic activity of its subjects. Fucking tyrants.
“the Mises quote will be bourne out eventually, and all of banksters will fade away and run from justice like the nazis at the end of WWII.”
Historically, Most members of the villainous Leisure class died old men in their beds. Despotism pays thats why people do it. They usually have enough wealth to outrun justice if the scheme goes south.  It is reasonable to assume this time is no different. Don’t Concern yourself with the bankers fate, concern yourself with their plan, and how that effects your fate.
The people who are responsible probably wont ever be brought to justice.  I know, it sucks.
Think about the practical affects of a 1% transaction tax. Is cashing a paycheck a transaction? What about a deposit?  Isn’t direct deposit technically a balance transfer?  Buying a 1 yr CD?  The real tax is certainly higher than 1%  It is actually a tax on fundamental economic behavior that will have a parasitic effect on the economy as this example illustrates.   The actual tax is any thing in between 1% and 100%  ( insert  infinite series with finite sums math here).  It is actually a tax on fundamental economic behavior that will have a parasitic effect on the economy as this example  loop illustrates.
$500 weekly paycheck deposit  becomes $495 after balance transfer fee.  Withdrawal, 490.05 in your hands.  You say, Bad bankers I will take my check down to the liquor store.  Well they have to wire the money to them, and wire the money to you, so they are going to have to charge you the fee twice anyway. Ok you got your money no comes the fun part.
1. Use cash to make said purchase of consumables and expenses You use $485.15 in  wealth to continue existence. You are now Broke  You paid 2.97% tax
2 Place money in stock market.  Ironic that stock trading, dominated by High Frequency trade corruption, which a transaction fee would kill totally and instantly is excluded from this tax.  You use $485.15 in  wealth to continue  the bankers existence. You paid 2.97% tax and were robbed of the rest
2.What if you bought $485.14 in bullion or any other immediately liquidate-able asset(tools, autos, businesses, etc….).  If you can convince the seller to sell it back to me for my purchase price:  you now have $475.49. you have paid a 5% tax to cash your paycheck, store wealth in something other than stocks or cash, and turn it back into cash.
Now you are free to choose option 1 2 or 3.  you  now have $470.73 worth of purchasing power and repeat until you have zero dollars.
a business that buys and resells stuff is also known as retail.  So this would an actual tax rate that increases every time a product is passed through the supply chain. stuff is bought and resold man y many times before it ends up in your hands. It implicitly benefits mega-corps because they dont have distributors.  The oaoer work is going to be hell for a small business. Tracking transactions for the whole calender year would be a huge pain in the ass for small business. You are going to have to keep a carbon copy ledger to run a fruit stand.  a summing the paperwork doesn’t bankrupt you, The no less than 5.3% cut in profits  due to completely new taxes wil.  It encourages the formation of vertical monopolies, It also would create a digital record of your entire economic activity, which the government will then give or sell to a member of the villainous leisure class.
What will actually happen is the creation of a black market and an explosion of the underground economy It wont generate nearly the tax revenue they hope. Instead people will hoard cash and trade in goods and gold.  It will gut the retail sectors
This ides is totally insane and I really really Hope Barry Soetoro vetoes it should it ever cross his desk
This tax is nothing compared to the VAT tax of approx 20% on ALL purchases that is currently floating around Congress.
Doug
Government has a right to do anything it wants to its subjects. But it has no rights at all when it comes to the sovereign people of the Constitution, even though it has declared war on us.
When I get federal reserve notes, I immediately trade them for something of value. You DO NOT own the notes anyway, thus they can use commercial law to steal them from the 99% of the population that is clueless.
Be your own government and protector. It is your natural right to do so.
Well, at least this WOULD be a Constitutional tax ( indirect) whereas the income tax is not……being neither an indirect tax, nor a direct, apportioned tax.
Its apparent that few here have actually READ the bill… this is more along the lines of a consumer tax and REPLACES the income tax… JFC PEOPLE! don’t you all READ before you jump to conclusions?? it seems most of you just follow headlines…
page 3, starting at line 19
page 6, starting at line 3
just to name a few…
Summary here: http://www.govtrack.us/congress/bill.xpd?bill=h111-4646&tab=summary
Full text here: http://www.govtrack.us/congress/billtext.xpd?bill=h111-4646
“To establish a fee on transactions which would eliminate the national debt and replace the income tax on individuals.”
Alternative money + black market will deflate the monster. If people start using silver or gold (or even “regional currencies”), the federal government would have no control over transactions or taxation. As they hasten to destroy the US Dollar, it is entirely likely that some other form or forms of exchange will emerge. Politicians can write all the tax laws they want, but if the legal tender laws are invalidated by private behavior, they lose control.
FWIW, destroying the currency is another way of cutting off the old, the sick, the very poor, etc. Hyperinflation will be the end of the Welfare State because the currency will lose value faster than any cost of living adjustments could possibly be enacted. Which government employees will show up for work when their weekly paycheck won’t buy them a loaf of bread?
Tax and spend, Tax and spend. The Government knows nothing about anything except Tax and spend. What are they going to do when there is no one left to tax?
Really folks I’m surprised the shooting hasn’t started. They have both hands in my pockets and surprise, surprise, surprise they are both empty! What now?
We in the private sector will be forced to brake the law just to keep some of what we produce. We will become private sector criminals. We will be a hole new class of inmates.
To look on the bright side we will get 3 hots and a cot plus cable TV. When the SHTF that will not be so bad.
Question everything you read – everyone has an agenda of trying to make us believe thier point of view. It is a little more complicated than it first appears.
Note this part was left out above:
“the phasing out of the individual income tax.”
–> “Debt Free America Act – States as purposes of this Act the raising of sufficient revenue from a fee on transactions to eliminate the national debt within seven years and the phasing out of the individual income tax. Amends the Internal Revenue Code to impose a 1% fee, offset by a corresponding nonrefundable income tax credit, on transactions that use a payment instrument, including any check, cash, credit card, transfer of stock, bonds, or other financial instrument. ”
http://www.govtrack.us/congress/bill.xpd?bill=h111-4646&tab=summary
It would appear that rather than paying income tax, one will pay a consumption tax – savers will benefit, spenders will hurt.
i’m guessing no one READ the bill before barking about it…
Listening to the Obama supporting Black Panthers the other day, one would think D-Day SHTF is just a few weeks away. Something about Killing Cracker Babies. I think that should be front page news and discussion on all message boards.
I’m surprised Couric and Williams didn’t report and support the Black Panthers story. I could just see them agreeing with the Black Panthers, and adding that it is George Bush’s fault for the en-slavery of some defeated people.
We already have a transaction tax = sales tax. Â
How about this, abolish the federal reserve, eliminate income tax, and cut government spending by…say, 50% and when our debt is paid off, move the dollar back to the gold standard.
And continue to scale back the government to the size of the constitution.
This is just a sneaky way to pass the value added tax upon the people.
Semper Fi
Perhaps I should have titled this article “Democrats move to eliminate income tax,” but forgive if I am a bit skeptical. 🙂
If this bill does move to eliminate income tax, truly eliminate it, then I may support such a 1% tax.
I’ve updated this story to reflect the Income Tax Repeal provision.
..Rep. Chaka Fattah (D-Pa.)Â has to go
i’m sure all the millions of unemployed will enjoy a 1% additional tax. GOVERNEMENTS MAKE PROBLEMS AND THEN REPEATEDLYÂ MAKE THE PROBLEM WORSE.
where i work staff has been cut 22% and wages cut 30%.
this is what should happen to all government entities including congress and all staff employees there.
I could support any tax change that lets me have my paycheck in full. Â Eliminate all withholding from paychecks. Â Give us back our paychecks and I will be happy to pay when I purchase.
@ Mac, thanks for removing the “comment of the day” thing. Â Blurbs I write on here are meant for the better class of folks who are SHTF users, not 20-somthings trying to figure out what to do with their corporate bonus checks. Â I peeked at the website they put it on, and was dismayed to see that it’s for youngsters with their heads up their asses. Â None of them are likely to get the message of what I was talking about.
Bullshit! Tax this & tax that. Paying double tax on just about everything now. I’ve never seen a ‘small tax” or one that was temporary. Show me a tax that has been fully repealed. As long as there are POS criminals running our government, they’ll spend as long as the can fleece the people who work and give it to those who don’t.Â
 Big question; We all pay taxes, so are we getting a good return for the amount paid in? Hope you all are, cause from where I’m sitting, I sure the hell ain’t. My neighbor’s aren’t either. Pisses me off to see people paying taxes for poor public services rendered but explode when a kid misses a spot while cutting their grass for a $20 bill.Â
 Take a look at the Blackmarket now. Yes, there is one. Mostly alcohol and tobacco right now. It’s because this current Administration has levied taxes on it where the Moonrunners and tobacco smugglers are able to make a profit on it. The bartering for skilled labor has started back up big-time.
 So go ahead; throw your paper dollars at substandard services and the entitlement crowd. You’re only enabling them to further damage your freedoms.  Â
  Â
One of the things that Gerald Celente predicts in our very near future is a TAX REVOLT by the people, amongst other things. We as a country are BROKE! The politicians won’t admit it, but there is no way in hell that we as a country can ever pay off our national debt and meet our current and future obligations that the government has made to the people.
One day in the very near future, some little old lady in Puckwanna, So. Dak. is going to take her $23.18 out of the bank and the whole country is going to go ‘tits-up’!
Let’s see here. I have already had to choose between having health insurance for my family or paying bills and putting food on the table. Now my government wants me to choose between paying additional taxes and paying my other bills and putting food on the table? People WILL revolt should this be attempted.
Comments…..Surprisingly, nobody seems to have picked up on the exclusion that stock sales would enjoy…Perhaps those millions of computer trades by the bank’s traders would eliminate the advantages they now possess over the public. Who are we really trying to protect with this exclusion!!
MadMarkie, at least beginning in 2014 you won’t have to choose any longer to have health insurance. You’ll either have it or be fined through direct confiscation via your income taxes, once the health care bill takes effect. So hey, one less choice!
All sarcasm aside, this is just the beginning of government’s idiotic response to their ballooning federal deficit. Ironic that the first American Revolution came about due to tax issues. So it shall be again.