19 October 2010

Debt Free America Act

As tweeted last night, this was making it's rounds around Facebook and other social networks.  H/T to my wife for reading it to me and her cousin (whom had posted it).

So, some quick Google Fu last night returned this bill summary:   

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.
As the rumor on the social networks went, this bill was "scheduled" for a lame duck vote after the election in two weeks.  I haven't confirmed or denied that, but it doesn't look like it's forging ahead very quickly. 

The summary in and of itself isn't all that obnoxious except for the one clause; "repeals AFTER 2017, the individual income tax."  YAY! (not).  We've seen this before in the form of social security.  We pass something now, take the hit up front, and then we'll "amend" or "repeal" something later.  As soon as you get used to paying the 1% tax on bank transactions AND your income tax, you'll forget by 2017 that Congress' original intent was to repeal the income tax.  In substance, this is effectively a different way to implement a fair tax, though it is more VAT (value added tax) in nature.  Taxing without repeal of or near 100% gutting of the IRC will do nothing to solve our debt problem or our job problem.  Again, we have a spending problem.  Austerity, plus sensible tax reform, including the fair tax, will restore our country to the economic engine that the world has long aspired to become.  

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