Sticking Stimulus to Your Securities

Got securities?

If they’re traded in your retirement account, you could end up being an unwitting source of funds to pay for Stimulus payouts.

If you’re a LittleGuy, two bills in the U.S. House of Representatives has your wallet in its Congressional crosshair to become funding for TARP (Troubled Asset Relief Plan).

What to do? Yes, you must do!

Tell Congress to block the Trader Tax.

Contact your Representative and/or

sign a Petition to Tell Congress to Block Trader Tax at rallycongress.com

This month’s Friday the 13th found an ominous bill in the US House of Representatives. It was introduced by Congressman Peter DeFazio (D-OR 4th Dist.), H.R. 1068, deceptively titled, Let Wall Street Pay for Wall Street’s Bailout Act of 2009. This isn’t the only bill worded to impose a financial transaction tax on securities traded in your account, but I’ll get to the other one later.

Think Wall Street is just the Big Boys playing with BigMoney? Think again. Whether you’re a sedentary trader in your retirement account (i.e., 401(k), IRA) or choose your stocks to trade through a broker, the US House of Representatives wants you to fund the Stimulus. Surprise!

The Let Wall Street Pay for Wall Street’s Bailout Act of 2009, or Trader Tax, involves a fiendish scheme to impose a .25% tax on securities you trade. The tax is based on the transaction amount, not the gain. The gain will remain taxable. It isn’t reduced if you loose, either.

If, for example, you purchase 1000 shares of securities at $10, and then sold the same securities at $10 (for no profit), you would owe the government $50 ($10,000 X .0025 plus $10,000 X.0025). The assorted broker and maintenance fees, and gains tax, will still apply. (Gasp! Yes, they really would do that to US!)

You can read the House Bill H.R. 1068 here.

Excerpt from H.R. 1068

• Congress finds the following:

(1) The Bush Administration allocated the first $350 billion of TARP funds in a manner that has outraged the Nation by failing to provide the most basic oversight of the funds.

(2) Congress has declined to block the remaining $350 billion of TARP funds despite the lack of oversight and the record fiscal year 2009 budget deficit estimated at $1.2 trillion.

(3) The Board of Governors of the Federal Reserve System has committed more than a trillion dollars to stabilize the economy by bailing out various banks deemed too big to ‘fail’.

(4) The $700 billion TARP fund and the new Federal Reserve lending facilities were created to protect Wall Street investors; therefore, the same Wall Street investors should pay for this infusion of taxpayer money.

(5) The easiest method to raise the money from Wall Street is a securities transfer tax, a tax that has a negligible impact on the average investor.

(6) This transfer tax would be on the sale and purchase of financial instruments such as stock, options, and futures. A quarter percent (0.25 percent) tax on financial transactions could raise approximately $150 billion a year.

(7) The United States had a transfer tax from 1914 to 1966. The Revenue Act of 1914 (Act of Oct. 22, 1914 (ch. 331, 38 Stat. 745)) levied a 0.2 percent tax on all sales or transfers of stock. In 1932, Congress more than doubled the tax to help overcome the budgetary challenges during the Great Depression.

(8) All revenue generated by this transfer tax should be deposited in the general fund of the Treasury of the United States, scaled to meet the net cost of these bailouts, and phase out when the cost of the bailouts are repaid.

But wait! H.R. 1068 isn’t the only bill out to have US LittleGuys empty pockets to pay for Government’s mis-spending.

Sneaky is as Congress does! Not only is the Trader Tax in H.R. 1068 as noted above, it is also listed as a line item in The National Health Care Act or the Expanded and Improved Medicare for All Act (HR 676 Section 211, Sub-Section C, “Funding”).

Here’s H.R. 676 National Health Care Act

What to do? Yes, you must do!

Tell Congress to block the Trader Tax.

Contact your Representative and/or sign the Petition to Tell Congress to Block Trader Tax at rallycongress.com

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