Thursday, October 28, 2010

Debt Free America or Overtaxed, Broke Citizens?


Elections are just days away and the outcome is favorable for Conservatives. My concern is what will the mad-as-heck Dems do in the following weeks, before they actually receive their pink slips.

I am disturbed by HR 4646, or the so called Debt Free America Act introduced by Representative Chaka Fattah (D-Pa) on Feb 23, 2010. It stipulates that Congress must reconvene no later than November 23, 2010 and vote on it by December 23.

Debt Free America sounds great doesn't it? Don't get too excited, I hope this doesn't ever get out of the committee and onto the House floor. Check out the facts, read the bill and contact your representatives.

This ingenious bill could put us debt free by 2017 according to its sponsor. Basically what will happen is every penny you put into the bank will have a 1% surcharge sent directly to the US Treasury. 
Example: Deposit $5,000 into a checking or savings account you are charged $50. 
Withdraw that same $5,000 you pay another $50, that is $100. 
Don't be fooled and say you will deal with cash only. You will still be charged 1% on ALL purchases you make, no matter what source of funds you pay with. My understanding is: 
  • Deposit your money in the bank - pay a charge
  • Withdraw your money - pay a charge
  • Pay cash for merchandise - pay a charge
  • Use your credit/debit card - pay a charge
  • Write a check - pay a charge
If you own a business you are responsible for adding the surcharge to the total bill and turning it over the Dept. of Treasury. When you deposit your income, you will be charged on the amount you deposit, the cycle just keeps going and going. Businesses will certainly have to spend more money to update their computer systems to comply with this and even hire people to take care of the additional work. Guess what not only will be paying a charge, but retail prices will surely go up.

Under SEC. 2 FINDINGS; PURPOSES.
(b) Purposes- The purpose of section 3 of this Act is to establish a fee on most transactions. Such fee--
  1.  is different than a sales tax in that a sales tax is charged only on sales to the final consumer and the transaction fee would apply to intermediate users as well as end users,
  2. is different than a value added tax (VAT), commonly used in European and other countries, in that a VAT is imposed only on a portion of a transaction’s value (roughly the difference between an item’s selling price and it’s cost) and the transaction fee would apply to the entire amount of the transaction, and
  3. is intended to raise sufficient revenue to eliminate the national debt, which was $10.6 trillion in January 2009 {much higher now}, during a period of 7 years and to phase out the income tax on individuals.
Sounds like it could work, think again, during the 7 years it will take to eliminate our national debt, you will be paying Uncle Sam your usual IRS taxes. Now for paying taxes twice you will receive a tax credit of 1% of your adjusted gross income.

All this extra income going to our federal government is supposed to be used to repay our national debt. That base is covered too:
  • SEC. 7. PRIORITIZATION FOR REPAYMENT OF NATIONAL DEBT. To take into account the national security concerns of the United States, the Secretary of the Treasury, in consultation with the Secretary of State, shall prioritize the repayment of the national debt and shall take into account circumstances in which the Secretary of the Treasury determines the early repayment of outstanding debt is detrimental to the fiscal stability of the United States.
In other words there is no guarantee the debt will be paid off, meanwhile for 7 years we pay twice to four times on our income. At the end of 7 years Income Tax will supposedly be eliminated. Currently we are facing losing all the Bush Tax Breaks, and they want to add more taxes on us. At the end of 7 years when our country is "debt free" there are plans to assist the personnel of the IRS in the transition, that money comes from the charges we paid. 1% doesn't sound like much, but once the bill is enacted the rate can be raised.

I am not a legal attorney, but from reading this bill these are my interpretations, 
I would like to hear yours.

Tea Party Deanie

27 comments:

  1. I will be writing to congress about this, it sounds like we are in for a screwing if it goes through. Don't be fooled that our country will be debt free in 7 years, I do not see this POTUS using money for what it was intended. One of the steps to Socialism is to break the economic system and this administration sure is on their way to accomplishing that.

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  2. This is indeed disturbing, I had no idea this was laying in wait for us. Congress needs to concentrate on the Bush Tax cuts when they reconvene after the elections. Lots of them are going to be pissed off and do what they can in their last days to destroy us. We can't sit back and let something like this happen!
    November 2 is only days away and we can gain control in the House and possibly in the Senate.

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  3. What the hell is new? O-bummer's doing everything he can to get our tax dollars in his grubby little pocket. I agree with you about the part it can be raised once it's voted in. If liberals win we might as well all go on welfare, because if we work we're gonna have to give it to them anyway.

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  4. I think paying one percent extra from what we make would be a great idea if within 7 years that we could put our country back on track with NO deficit. I would back it all the way.

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  5. The sad part is I would pay one percent also. The problem is we have been screwed out of SS because they spent the money when they got it in. Who's to say they won't do it again? Who's to say, and I speak for working Americans, that I would love to see Federal Income Tax disappear in 7 years. We have seen within the past years Dems and Repubs will spend our money as fast as they can. Our future lays in the hands of bringing back our country and not lining our elected officials pockets.

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  6. I would gladly pay 1% to see IRS stop in 7 years and make a fair tax come available. I don't think that will happen. The taxes will grow for the working people, for the people on government aide we will keep paying. Let's hope this bill does not go through.

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  7. I don't believe this will solve the problem. The greed of this administration would put this money to other uses. If it were this simple to rid our country of the national debt I think it would have been enacted a long time ago.
    This is just another socialist trick to break us.

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  8. Don't know where this country went to he**. We have always had a national debt, but no one ever thought of changing us to socialism to pay it. This plan is nothing more than socialism at its worst.
    If they want to impose a fair tax they need to completely drop the IRS. But all the transactions listed here cause for more and more taxes on money we already pay taxes on. This prez sucks.

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  9. I hope it is not too late, but i think this might reach one of my children. Our government should not be allowed to make such a major decision as this before a new session of congress is voted in.
    I too hope it never gets out of the committee. this is pure socialism plain and simple.
    Vote with the future of our country in mind.

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  10. This is disturbing! I too would entrust an extra 1% to the government if I trusted their agenda. They took SS dollars and distributed it to failing government projects, now that it is broke and we are in a recession our seniors do not get a raise for 2 straight years. Everything else has gone up but their cost of living adjustment remains low. From what I just read, I don't trust them to do the right thing and pay off our debt or to drop income tax in 7 years and eliminate the IRS.

    We The People can not endure any more taxes, fines for not having insurance or anything else this administration dishes out. Gramps, I hope you can open your childrens eyes before it is too late. God Bless You and Yours.

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  11. I agree with you Gramps, but I think the majority of us would be happy to pay one per cent extra if we were certain the income tax would stop in 7 years.
    From what we have seen of transparency in this administration there is no way we can believe anything they say. Not only that but once they pass the law the percentage can always go up.

    Our largest hope for the future is to get greedy politicians on both sides out and try to find someone who can work in Congress and retain an honest bone in their body.

    This voting year is so intense over many categories and issues we are dealing with, I hope the people can vote smart and not for the sake of appeasing friends or family.

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  12. Mad Sally's RoommateOctober 30, 2010 at 4:52 PM

    If something like this would work I am sure there is not a person in this country who would not be behind this. The prospect could be too good to believe.

    My understanding is bills like this usually do not ever go past the committee. Yes, RR, I do go to http://govtrack.us and check things like this out.

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  13. Deanie, Urban legends says this is nothing to worry about. Says an e-mail circulating is mostly false.
    "It's true there's a bill in the House of Representatives which would impose a one percent tax on financial transactions if passed (H.R. 4646: Debt Free America Act), and it's true that it was introduced by a Democrat (Rep. Chaka Fattah, Pennsylvania), but the legislation has zero co-sponsors, hasn't even been recognized, let alone endorsed, by the Obama administration, and is expected to go nowhere."
    check it out:
    http://urbanlegends.about.com/od/barackobama/a/Obama-One-Percent-Transaction-Tax.htm

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  14. lucy, who really cares what urban legends says. I read what they have to say, the e-mail they quote is not entirely the truth. The truth of the matter is the bill is in a committee and even though nothing will probably come of it someone thinks it is a good idea. The concept is laid out and with this administration will probably get snuck in some other bill and none of us will be the wiser.

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  15. This and every bill that goes to a committee should be a concern to us. It is small bills like this that no one knows about that just get swallowed in a mass of pages and confusion, like health care.

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  16. I would be happy to pay one per cent if the IRS ended in 7 years. The biggest problem I see with this is if they do get it voted in, it would take the Great Houdini to figure out how to get us out of it.

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  17. lucy,I knew what urbanlegends had to say about this bill. If you study a lot of these small bills that seemingly will never get anywhere end up as a part of another much larger and complicated bill. Before anyone realizes something is there it is too late.

    Health care smuggled a smaller bill, reworded it and included it in our intrinsic, unwanted Obamacare. I wrote about one disturbing extra that was included that will effect all of us and our wallets. Any transaction over $600 will require the purchaser to send you a 1099 form beginning 1-1-12.
    Read my previous blog to fully understand this. http://rednecksforamericans.blogspot.com/2010/07/liberals-your-health-care-lies-and.html

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  18. What a wonderful idea, become a debt free country in 7 years. I think this needs more research before it becomes a law. I too would give another 1% if I felt it would work and be on the up and up. Maybe with the change that will soon be coming we could explore a proposition like this and save our children from a lifetime of debt.

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  19. I heard about this months ago and it is frightening. I agree with you Deanie it is what the pi**ed of Dems will do in their lame duck session that scares me. We are likely to see some pretty far-fetched bills get passed. For sure the Dems are not going to leave gracefully.
    God Bless America - We still are a Free Nation and will remain that way.

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  20. This is an absurd bill and should go no where. The lame duck session is about to begin and I doubt if much will be done. They need to work on the Bush Tax Cuts and the budget, not Obama's desire to control everything we do. That's not going to open and we will prove it today.

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  21. I for one would not be TOO eager to give Congress another way of collecting more taxes, based on their record. Lincoln established the income tax in 1862 to pay for the Civil War. It was repealed 10 years later but Congress revived it in 1894 but the Supreme Copurt declared it unconstitutional the next year. In 1913, the 16th ammendment was ratified giving Congress the authority to levy an income tax, AND congress hasn't let up since. The original income tax was 1% of net revenue over $3.000 and 6% of income over $500,000. In 1918, the top rate rose to 77% to pay for World War I. Remember, Federal Income Tax started out at 1%. Congress has a REAL BAD HABIT of co-mingleing money, taking from one fund to pay for their excesses. I have little confidence that a 1% surtax would be used for the exclusive purpose of paying off the national debt and I believe that Congress would continue to incur more debt.

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  22. Good info 1Tea-edTexan! I never knew any of this. I don't think the tax will go for the purpose.
    Thank God we have taken control of the house. Something like this will never get past he NEW house!

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  23. I'm just now getting into politics so I can't say if this would hurt or help our country. I look at social security which has been run into ground and think this could happen again.

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  24. Hopefully the lame duck session will overlook this one!

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  25. I think this would just be another way to steal tax-payer dollars. By the time the 7 years were up, they would have it all spent anyway on pork or something else stupid.

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  26. No 1% tax! It doesn't sound like a good plan to me. If we give them more money, we will just be funding another joy ride for Obama and his massive entourage.

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  27. What will the lame duck session produce? I am very concerned about this. Hopefully at least we will have something done about the tax cuts.

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