Just read about H.R. 4646, a proposed piece of legislation in committee at the moment that will introduce a 1% “Transaction Tax” everytime you transfer or get money transferred to you. It’s not just a national sales tax when you buy things, but a tax whenever money is moved between two institutions or individuals.
Has anyone here with a background in economics heard of this bill? Would like to know if I should get behind it or not. I believe the income tax system is a failure, but I’m not sure a national sales or transaction tax will solve anything either. It seems fairer in some respects, but large businesses will only transfer what they will lose from the tax to the people who buy their products, so I’m not sure all the burden won’t automatically fall upon the consumer and in the end force people to buy less, thereby negatively impacting the economy overall.
Greater minds than mine need to flush out the long term effects of such a radical change. And until they eliminate the income tax in 2017, everyone will be paying up the nose until then.
H.R. 4646: Debt Free America Act 111th Congress
This is a bill in the U.S. Congress originating in the House of Representatives (“H.R.”). A bill must be passed by both the House and Senate and then be signed by the President before it becomes law.
Primary Source
See H.R. 4646 on THOMAS for the official source of information on this bill or resolution.
Summaries
Congressional Research Service Summary
The following summary was written by the Congressional Research Service, a well-respected nonpartisan arm of the Library of Congress. GovTrack did not write and has no control over these summaries.
2/23/2010–Introduced.
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. Defines “transaction” to include retail and wholesale sales, purchases of intermediate goods, and financial and intangible transactions. Establishes in the legislative branch the Bipartisan Task Force for Responsible Fiscal Action to review the fiscal imbalance of the federal government and make recommendations to improve such imbalance. Provides for expedited consideration by Congress of Task Force recommendations. Repeals after 2017 the individual income tax, refundable and nonrefundable personal tax credits, and the alternative minimum tax (AMT) on individuals. Directs the Secretary of the Treasury to: (1) prioritize the repayment of the national debt to protect the fiscal stability of the United States; and (2) study and report to Congress on the implementation of this Act.