Here’s an interesting new bill introduced by Congressman Chaka Fattah (D-PA). It appears to call for a one percent transaction tax and the eventual elimination of individual income tax.
According to the Congressional Research Service, the Act proposes 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. The Act:
• 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.
Click here to read the entire bill.
It’s an interesting concept although it appears to add substantially to the tax liability of Americans through 2017. It’s basically a National Sales or Value Added Tax.
What are your thoughts on such a tax? Clearly it would impact homes sales as the one percent tax would have to be paid on the sale or purchase of real estate.
