On the surface, it may look like a good deal. Let's take a look...
If you make $4000.00 a month, are paid twice monthly, and have direct deposit, you will incur a tax of $40.00 every month for that deposit. If you write checks to pay monthly bills and expenses of $3000.00 you will pay an additional $30.00 of tax. If you take the remaining $1000 and transfer it to your savings account, you will incur another $10.00 tax. So on your $4000.00 per month income, you will pay $80.00 in tax.
Now the administration is going to try to sell this by telling you that the income tax will be "phased out" over the next 5 years. Do you really think that will happen? When they told us that we would incur an "income tax" of 1/2% on only the first $1400 of income in order to sell that tax, did they stick to their word? Probably the people who said it did, but subsequent administrations did not. Nor can we believe subsequent administrations will not renege on this "promise".
And what about transactions in your 401K? Will they be affected? Yep! One day you gain, the next you lose, and all the while a "transaction fee" is being assessed. What a windfall for the government there, and a potentially substantial loss of retirement income over the course years for you.
The Bill is written to include this text:
IMPOSITION OF TRANSACTION FEE.
‘(a) In General- There is hereby imposed on every specified transaction a fee in an amount equal to 1 percent of the amount of such transaction.
‘(b) Specified Transaction- For purposes of this chapter--
‘(1) IN GENERAL- The term ‘specified transaction’ means any transaction that uses a payment instrument, including any check, cash, credit card, transfer of stock, bonds, or other financial instrument.
‘(2) TRANSACTION- The term ‘transaction’ includes retail and wholesale sales, purchases of intermediate goods, and financial and intangible transactions.
So not only are they looking to change the tax code to incorporate a national "sales" tax, they are also going after money unassociated with any sale, as described in the first paragraph of this post. Yeah, let's just open our wallets and give them free reign, and once we do, how long will it be before those "transaction taxes" are raised to 5%, 10% or 15%? The government knows no fiscal restraint. Taking our money without our consent must not be allowed. With a national sales tax, our consent is implicit when we decide to purchase something. With a "transaction tax" that is not the case.
I say yes to a national sales tax, or a flat tax, but no to a transaction tax!
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