House Bill could have you paying tax on financial transactions - KCBD NewsChannel 11 Lubbock

House Bill could have you paying tax on all financial transactions

By Christie Post - email

LUBBOCK, TX (KCBD) – A bill making its way through the House of Representatives could have you paying a 1% tax on every financial transaction to eliminate the national debt. There's an email circulating around inboxes across the country about this hot topic.

Congressman Chaka Fattah, D-PA is sponsoring H.R. 4646 titled Debt Free America that has brought a lot of concerned citizens to the table. It's been introduced and referred to a committee back in February, so it's still many steps away from being signed into law.

The goal of the bill is to reduce the national debt within seven years and start the phasing out of the individual income tax. But here locally banks say they're concerned about the effect this could potentially have on their customers.

"The ironic thing about this, is congress just passed the financial reform and financial overhaul bill signed into law, to protect consumers from price gouging and unfair practices by financial institutions. And they turn right around the legislature tries to impose a one percent tax on bank customers," said Lubbock National Bank Senior Vice-President, James Arnold.

James Arnold, the senior vice-president of Lubbock National Bank says the entire banking industry is concerned about H.R. 4646. In a sense this bill could make people pay a one cent tax on every dollar they spend. Whether it's getting money out of an ATM, paying cash or credit at a retail store or any financial transfer, the only exception is the purchase or sale of stock.

"Our lobbying efforts and our legislative efforts are on top of this and watching it closely. The fact it doesn't have a co-sponsor shows that it may, hopefully die in committee," said Arnold.

The bill currently has one sponsor, Pennsylvania Democrat Chaka Fattah and no co-sponsors. Here locally District Randy Neugebauer issued a statement concerning the bill.

Statement from Congressman Neugebauer:

"Legislation that raises taxes is not the answer. There are more effective ways to pay down the national debt rather than placing additional burdens on America's working families and small businesses. Now is not the time to raise or invent new taxes, now is the time to cut taxes, and cut out of control spending. I have sponsored two bills that address these challenges:  H.R. 4587 and H.J. Res. 87.  H.R. 4587 requires a 2/3rd vote to increase the national debt limit and requires this vote must be a stand-alone bill, not part of a bigger package with many components as is common practice.  H.J Res. 87 is a Constitutional Amendment that requires the support of 2/3rds of the members of the House and Senate to raise taxes except in a time of war. I oppose H.R. 4646 because it is an additional tax and an additional burden on Americans who have made it quite clear higher taxes are unacceptable."

Others agree and say all the taxes add up. "It adds up and so that's why this guy introduced this legislation to reduce the national debt. I appreciate his efforts on doing that. I'd rather see them cut spending than try and increase revenue," said Arnold.

Now the bill does say it will reduce the impact of the tax by offering a one percent tax credit on income tax for lower income families. We have also talked with some political insiders about this bill and some say it doesn't have a chance since it only has on sponsor, but others say proponents of this bill in congress are just waiting until after the November election.

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