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Democrats Want to Tax Your ATM Withdrawals

By: Erick Erickson (Diary)  |  July 8th, 2010 at 05:00 AM  | 

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You remember Lanny Davis, right? He’s the nice guy you sometimes get confused with Leon Panetta because they both worked for Clinton and their names both start with “L”.

But when Davis speaks and floats ideas, it is more than just your run of the mill Washington personality floating an idea. When Lanny Davis drops an op-ed, there tends to be more to it. So we should take note that he’s got Democrats signing onto a plan to tax your ATM withdrawals.

Why, you ask? Well, to pay down the deficit.

Rep. Chaka Fattah (D-Pa.) has introduced Davis’s dream legislation. It would charge a penny for every dollar of your money drawn from an ATM machine. That would then beg the question — why put your money in a bank if you are going to get taxed merely for the right to access your money.

But wait . . . it’s gets better. They’re back to wanting to tax the internet too.

House Energy and Commerce Communications Subcommittee Chairman Rick Boucher (D-Va.) has introduced legislation to allow retail sales taxes to be levied on internet purchases.

So instead of being pro-growth to reduce the deficit or pro-job creation, the Democrats have fallen back into being your typical tax and spenders.

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COMMENTS

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  • JadedByPolitics

    from Americans who get up and go to work everyday for their favored LAZY Americans!

  • flajim

    We’ve already had a large capital flight from this country in advance of tax increases.

    Back when marginal income tax rates were sky high in the early 80s, revenues remained flat until the Reagan rollbacks. Almost overnight, incomes shot up (and so did tax revenues) when the tax rates became reasonable.

    All this bill will do is turn banks into check cashing centers and their reserves will drop, resulting in less money to lend fore investment and purchases.

    ‘Only’ 1%? That’s about the percentage of people who were ever supposed to be affected by income tax when it was introduced. We know where we’re at on that now.

  • drbob1988

    to allowing the government to steal the income that we work hard for so they can redistribute it to finance their coup.
    Elections are good start.

  • NeoKong

    I cannot wait until we finally get the chance to vote these clowns out.
    In my lifetime I cannot remember a particular Congress being so tone deaf and hostile to the American public and people who earn money.
    I feel like we are being punished.
    It’s as if they want to bankrupt everybody.
    It’s as if they want to sabotage the economy.
    It’s like they want to get creamed.

    It’s the spending stupid.

  • edintexas

    So will they exempt their constituents from this proposed tax (e.g. welfare payments made via direct deposit to an account with debit card access)?

    This will be sure to have SSA beneficiaries demanding they once again receive checks, instead of the mandated direct deposit. And that is a big voting block to irritate. Oh well, what the heck, they’re already irritating the majority of citizens.

  • Kudzu

    Limit the fees banks can charge on ATM withdraws?

    I know it was being discussed but here’s an act of not seeing what the other hand is doing.

  • Kudzu

    I see what you did there.

    This way, since we’ll all be broke and on government hand out doles we’ll not have to pay this tax. That way we dont have taxes raised on those of us under 500..err 250 err… 175, um ok $250k was a good number after all.

  • Kudzu

    I see what you did there.

    This way, since we’ll all be broke and on government hand out doles we’ll not have to pay this tax. That way we dont have taxes raised on those of us under 500..err 250 err… 175, um ok $250k was a good number after all.

  • mark1957

    It starts at 1%, then as time goes by the rate jumps to 10% or 15%, The government does this with every tax they levy. The truth is, we do not have a revenue problem, we have a spending problem.

  • gamechange11two

    Then in a couple of years when the democrat plan has paid off the deficit the government will repeal the tax, just like they did with the telephone tax, right? The phone tax was levied to pay for the Spanish-American war back in 1898. After the war ended it was repealed…in 2006. Close enough for government work.

    117 Days until DOOM!

    A liberal is an individual who never lets a firm grasp of economics to stand in the way of his opinion.

  • bigmaude

    They DO want to bankrupt and everything else you listed. I honestly believe this administration is DEEPLY evil. Barack Obama hates America, white people, poor people, sick people, etc. Let’s not forget that a true Muslim is taught from the Quran that he make feign to be who he really is to get the end of his work. I would suggest to all of us that we focus on our states, counties and communities. That will be where our protection comes from on a horizontal level.
    Off the subject, everyone go find tje president and wife speaking from the balcony on the 4th as he slaps the founders, AND, seriously, have you ever seen a “first lady” in a HALTER TOP???????? Come on. She just shows she has no respect for her place as a first lady.
    I’ll be surprised if this gets posted. Don’t want to be banned……

  • bigmaude

    I like playing in your sandbox……..

  • Darin_H

    Put this into effect and you will see an even quicker move to a cashless society – and that’s probably not a good thing for those who don’t manage money so well already.

  • http://www.hakubi.us/ Neil Stevens

    A cashless society is one that is easier for the state to control. Cash is difficult to track.

  • brezley67

    a 10% tax on any Western Union cash going south of the border ?

  • Kudzu

    ::sarcasm::

  • blogan2

    The big issue I have with this is how many times will I pay this?

    1. Work does a deposit of my money into my account.
    2. I make an ATM withdrawl to get some cash for a trip.
    3. I’m done with the trip and re-deposit the extra money in my account again.

    Imagine business that are constantly doing transactions between one another. They’re going to come up with weird schemes that have them just settling once a month for a single amount in a single direction.

  • DirtyDave

    Part of this election cycle points repeated over and over again is that we do not have a revenue problem. We have a spending problem. Taxing the citizens is not going to solve the spending problem.

    Of course the Republican leadership really doesn’t see it this way at all. Taxing ATM withdrawals? I bet more than one is stroking his chin and saying, “well, maybe as part of a comprehensive budget compromise to reduce the size of the debt with the promise of reducing spending at some time later as determined by a bi-partisan, blue ribbon commission. ”

    “Tea Party? Irritating, noisy bunch. I just hope Lindsey Graham is right.”

  • americaisours

    This , madness WILL NOT end until we vote these evil, evil, evil people out of office!

    Under the constitution they are committing Treason and Tyranny and still we sit and take it!

    VOTE, VOTE, VOTE!

    And for those of you who “just aren’t political,” you had better VOTE because these politicians are running – soon to ruin – YOUR lives!

  • southernilpat

    It won’t be the EVIL MONEY GRUBBING PROFITEERING bank charging you this fee, it will be the good and gracious government who will, of course, spend the money in the RIGHT way.

  • Finrod

    Using 2008 numbers as an example: There was $755 trillion in total transactions that year. If you deduct the exempted $312 million in stock transactions, that leaves $443 trillion in new revenues, minus the cost of the tax credit and other possible measures to soften the impact on the poor.

    This is the biggest math fail I’ve seen in quite a while. $755 trillion is $755,000,000 million; subtracting $312 million from that would leave $754,999,688 million.

    I don’t know which specific numbers of his are entirely bogus, but I strongly suspect that it’s all of them.

  • teresakoch

    kinda scary…..

  • teresakoch

    kinda scary…..

  • southernilpat

    It won’t make any difference.

    “His ?Debt Free America Act? (H.R. 4646) would impose a 1 percent ?transaction tax? on every financial transaction ? whether paid by cash, credit card or any form of financial transfer[.]”

    This is NOT just a tax on ATM withdrawals. It is a tax an any transaction that takes any form. Except, of course, for the exemptions that will be put in place to protect the Democrats base voters.

    I’ll keep my cash, thank you. What you will see won’t be a move to a cashless society but an increase in “black market” (i.e. off the books, cash only) transactions.

  • Richard Mullins

    So messing up on math is normal for him. Idiots always need a new revenue stream in order to have become captive to their ways.

  • http://theminorityreportblog.com Repair_Man_Jack

    Than he never set foot in a calculus class. He wouldn’t be a stellar Econ 101 student either.

  • jb13

    Didn’t I see this in a movie once? Except then it was a bunch of geeks, trapped in cubicles in a non-descript office in southern California, inputting a computer program that would allow them to grab each fraction of a cent on every financial transaction at the company that they were soon leaving.

    The big difference, of course, is that if the government does it, it’s technically not a crime, right? And it’s not like we’re ever going to miss those pennies, nickels and dimes, right?

    D^*#, it feels good to be a gangster. Right, Barack?

  • ihateliberals

    that the best way to raise revenue is to cut taxes. Reagan knew and understood this principle and look what happened to the Carter Deficits. they were wiped out almost over night.

    While a penny a transaction doesn’t sound like much it could make it too expensive for some people to keep their money in the bank or it might make them go back to using checks again. These increases in taxes seldom hurt the rich but they always hurt the people that need the money the most.

    A tax on any retail business cuts down on the amount of traffic a store has. if you start taxing the internet transactions you will stop a big percentage of shoppers. Raising taxes generally do not bring in more money but may limit the amount of purchasers. back in the late 80′s early 90′s when Bush I raised taxes on the boating building industry it bankrupted many of the builders because people stopped buying the boats. You can never tax nor spend your way to prosperity. The Democrats will never learn this lesson. They need to be removed from power.

  • ihateliberals

    They really don’t understand the poor. Poor people need thier money in real time. giving Tax credits doesn’t get the gas tank filled or food on the table. These people (Democrats) are mathematics idiots.

  • JSobieski

    moving along a supply/demand curve, and a shift in the supply/demand curve. They live with all sorts of static assumptions, in a world where the one thing you can count on is change.

    Nobody is as dogmatic as a leftist.

  • soljerblue

    They’d have to figure out how to tax debit card purchases — not saying they can’t or won’t — but most folks I know don’t use ATMs except in a minor emergency. Cash? What’s that? What I stuff in my sleep number matress LOL

  • uselogic

    So if you use a debit or credit card they ding that too. Its not just for cash withdrawals. Functions like a mini-VAT.

  • llou25

    The rest of the story about the proposed legislation is that this 1% transaction fee would take the place of income tax. It’s a pretty wild idea that probably will go nowhere in the senate.

    I would like to say however, that this wild idea might be a lot better than the Mike Huckabee idea of replacing income tax with a 23% national sales tax. I live in an area where we already have a total sales tax of 10%, so that would
    be a huge amount of tax I’d be paying everytime I bought anything or received any kind of service. He calls it “fair tax”, I call it robbery.

    Oh well, I guess we all want to bring down the deficit, but none of us want to contribute to doing that. Just like we’re all for cutting government benefits as long as the cuts don’t apply to any of the benefits we personally benefit from.

  • cmw

    Before trolling and spreading misinformation about the FairTax, please do some reading. It’s actually the single best idea for how to bring sanity back to how we fund government.

    Consumption tax on new goods/services works because everyone consumes, so everyone pays. Illegals pay. Rich folks living off of interest income but buying that new yacht pay.

    The people who STOP paying are wage earners and corporations. These wage earners, even low-income earners, pay a sizable portion of their income to the government. That includes payroll taxes, which for many workers are more than income taxes. It’s even better for corporations, who already factor in to their costs 20-25% income taxes. Take that away and prices will freefall, as companies have room to compete and lower prices. Then your FairTax doesn’t really end up adding that much at all to the cost of goods, and on top of that you are keeping every dime you earn.

    It’s up to you … read and be informed or troll here ignorantly and be ignored/ridiculed.

  • conservativecrusade

    your belief concerning the fair tax is only an opinion.

    Regardless of where you fall in the fair tax discussion, there are problems with it that will cause issues for everyone. These problems is one reason it does not exist in this country so far.

    Here are a few:

    When people hear about a 23 percent national sales tax, they naturally equate it to the state sales taxes they are familiar with. If a state sales tax is 5 percent, then this means that if someone buys something for $1 they will pay $1.05 at the checkout. Thus they assume that the FairTax would cause a $1 product to cost $1.23 if it were to be enacted.

    In fact, the rate is not 23 percent, but 30 percent. The 23 percent rate is arrived at by treating the tax as if it were already part of the price instead of being on top. Thus if a product were to sell for $1 and the FairTax added 30 percent, the 30-cent tax comes to 23 percent of $1.30. This is how a 30 percent rate is deceptively turned into a 23 percent rate.

    The FairTax would apply to all government purchases at every level. Only education spending is exempted.

    States would have to pay 30 percent more on every highway and bridge they build, local governments would have to pay 30 percent more for police and fire protection, and even the federal government would have to pay the tax to itself when it buys weapons and ammunition for troops.

    Taxes would have to be increased at the state and local level to pay the FairTax to the federal government. The FairTax rate would also have to be higher to pay for the additional federal spending it will require. However, FairTax supporters exclude this higher spending from their calculations. The 23 percent rate is designed only to be revenue-neutral, not spending neutral. Thus the federal deficit would either rise by more than $200 billion per year or spending would have to be cut by this much.

    The FairTax rebate would also add $600 billion to federal spending annually. Although its supporters say it is just like the one we get when our tax withholding exceeds the taxes we pay on our tax returns, the FairTax rebate is more like Social Security because it comes in a monthly check.

    Although FairTax supporters tout the generosity of the rebate, it is extremely modest because it is based on the poverty level income – a figure that bears no relationship to the actual cost of living. As a consequence of the way the poverty rate is calculated, childless couples would get a monthly rebate of $391 per month, but a single mother with two children would only get $329 per month.

    Finally, FairTax supporters assume away many of the problems with their plan by asserting that prices will fall by 22 percent once all income taxes are abolished. Prices at the checkout would be about the same with the FairTax as they are now, they say, but everyone would come out ahead because their net wage will now equal their gross wage.

    If this were so, it’s hard to see why the rebate is needed, since there seems to be only winners and no losers under the FairTax. In reality, for prices to fall by 22 percent, business costs would also have to fall by 22 percent, which means that all workers would have to take a 22 percent pay cut.

    It’s unlikely that workers would agree to this. It is far more likely that the FairTax will raise the price of everything by 30 percent. This has been the case in every country and every state with a sales tax. The idea that prices will fall is just a pipe dream.

    One more issue with the FairTax for the road.

    The major effect of the FairTax plan is to shift the burden of taxation away from high income earners and towards average Americans. A consumption tax is what is called “regressive.”‘ This means it has a greater effect on the less affluent, for whom consumption is a large percentage of their income. Proponents claim that the plan rewards saving, but this is another way of simply saying it doesn’t tax the income of those who make enough to save. Meanwhile those who are essentially forced to spend most of their earnings just to meet the costs of living will pay a much higher proportion of their total income in taxes than a higher income earner. This is the exact opposite of the tax bracket system of the income tax, and probably has a large influence on whether or not individuals regard the proposed change as fair.

    If you like the fair tax and can show valid reasons for your belief, fine it is a valid belief. But I just showed you a few issues with it which means your whole “troll, ignorant, will be ridiculed’ rant was way off base. His opinion is just as valid as yours.

  • southernilpat

    In the article referenced here it says “In the long term, the transaction tax could replace the need to rely entirely on the income tax.” This sounds to me like this would be in addition to the income tax, not replace it.

  • debrarae

    Why am I not surprised the Liberals would be doing this? And we can’t even trust Brown of MA to filabuster on this one!

    I believe it was Professor Ghilarducci who proposed ‘conviscating’ our 401k’s in the first place, and placing it in Social Security.

    Her exact words were

    “If you have a 401k worth $50,000; you’ll be ‘guaranteed’ a monthly check of $500 per month”

    Now it’s gone from that to Let’s bleed the country dry so the UNIONS can have MORE than their ‘fair’ share.

  • debrarae

    It will be a addendum, not a ‘replacement’. And let’s not forget about Cap & trade, the increased ‘food’ tax, the VAT tax, etc……..

    By the time they get finished with us, we’ll have NOTHING.

  • debrarae

    It’s a addendum, not a ‘replacement’. It’ll be added to all the other new taxes that will be thrown in our faces.

  • Finrod

    Businesses would not pay taxes on things they buy, so neither would state governments. Your whole long rant is based on a false premise.