As we enter into the end of 2010 the media is full of reports about the increase in taxes that are on the way whether by the expiration of the Bush tax cuts or an increase of taxes imposed by the government.  I have come across and article that was written by Lanny Davis who was special counsel to President Clinton in which he discusses a new ” tax increase bill”  introduced in Congress.  According to this bill there will be a 1 percent “transaction tax” on every financial transaction and we would all pay one cent for every dollar for these transactions whether by cash, credit card.  The article says this tax will not apply to the buying or selling of stock.

Looking at this on the surface some might say ” it is only a penny and it is no big deal” but I say “It is a big deal” if you look at the history of tax increases.   Remember the tax on your phone bill that was still being levied until recently to pay for the  Spanish-American war of  1898!!  This was just recently removed from the phone bill after 100 years and the war only lasted a year! Yet, we as the tax payers were not offered a refund were we?  Look at the payroll tax which started out as “1 percent” deducted from take home pay and compare to where it is today!! These are just two examples but there are many more of this government trying to solve their out of control spending by raising taxes!!

You can be assured that if this bill passes Congress and this “1 percent” tax on financial transactions is imposed a few years later Congress or the President will decide this needs to be increased by 2,3 or 4 percent!!  It will never be enough and this is why we need to pay attention when a bill like this gets introduced in Congress and defeat it now before it takes root.  Because if this “tax bill” is allowed to take root then we will be stuck with this tax for 100 years just like 100 year old tax on your phone bill to pay for the Spanish-American war of 1898!

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