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October 21, 2010

Transference Tax: Rumor and Fact

An email rumor is beginning to pick up some steam about a 1% “transference” tax on all financial transactions. This email is full of errors and there’s no chance Congress will consider this bill during the November-December “lame duck” session.

Here are statements from the email, followed by the facts.

Email: I have gone into THOMAS (Library of Congress) and printed out and read all 15 pages of this bill which has been given the “Short Title” of “Debt Free America Act.”

Fact: You can find the Debt Free America Act here: If you click “Bill PDF,” you will find that it is 30 pages (although, to be fair, it may have printed out 15 pages in the html format.).

Email: [one has to marvel as the marketing ploy used here – there is nothing free about the bill – for America].

Fact: The intent of the bill is to eliminate the national debt in seven years. It may be a bad bill, and it may not achieve this objective. Nevertheless, by Congressional standards it’s a fair title, and its contents are in keeping with the bill title.

Email: It is the most socialistic thing I have ever read.

Fact: In full context, it’s not much more socialistic than a sales tax.

Email: Just think, if you deposit $5,000.00 into your checking account or savings account the bank has to take out 1% or $50.00 of that money and send it to Washington. Then, any checks or cash you take out of your bank they will deduct 1% from what is still in the bank and send it to Washington.

Total put in the Bank $5,000.00. $100.00 of that you give to Washington [whether you want to or not… and over and above any taxes you are already paying].

Fact: This is the truth, and it is bad, but it’s not the whole truth. Three ommissions:

1. A tax credit of up to 1% of adjusted gross income will also be issued. This credit will gradually decrease for couples earning $250,000 or more.
2. This tax is intended to pay off the national debt by 2017.
3. After which, the individual income tax will be abolished.

Again, there are elements of the bill that don’t sound so great. But the two purposes – eliminating the national debt and the individual income tax – are hardly “socialistic.”

Email: This bill, spells it out that everyone will pay the Government 1% of their gross income.

Fact: It spells out that everyone will receive a tax CREDIT, and for the majority it will be fully 1%.

Email: Page 9 states the House and Senate shall convene not later than November 23, 2010 and Page 11 states the vote on passage shall occur not later than December 23, 2010.

Fact: This bill, H.R. 4646 was introduced in February, and part of what it does is create a fiscal Task Force “for responsible fiscal action;” according to the bill, the House and Senate must act on the Task Force’s recommendations between November 23 and December 23.

In other words, according to the original plan of the bill’s author, H.R. 4646 would have passed several months ago, and the Task Force it creates would be working right now. Only if these two things were true, would Congress be required to act on the Task Force’s recommendations. But the Task Force doesn’t even exist because the bill was never passed.

Email: The bill is HR-4646

Fact: The bill is H.R. 4646 (or HR 4646). That might seem like a minor detail, but when a bill number isn’t styled correctly, that’s usually a tip-off that the rest of the message has numerous errors. In fact, we see sensational rumors, frequently, with errant bill numbers, and we know, almost instantly that we have a chain letter full of errors.

Email: introduced by US Rep Peter DeFazio Dem-Oregon and US Senator Tom Harkin Dem-Iowa.

Fact: This is brazenly false. The bill was introduced by Rep. Chaka Fattah (with no co-sponsors). Thomas does say there is a related Senate bill, S. 2965, but that bill doesn’t provide for a tax; its only commonality is the creation of a fiscal commission. And, by the way, it was introduced by Sen. John Ensign, a Republican, not Tom Harkin.

It’s true that, sometimes, a bill with no-cosponsors may be brought to the floor – if the sponsor is the Majority Leader or other powerful member of Congress. But Rep. Fattah has been pushing this bill for six years to no avail. There is no chance this will come to the floor in the lame-duck session. It was dead as soon as it was referred to the Ways and Means Committee back in February.

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