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Rumor: Obama to Impose 1% Bank Transaction Tax

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Updated Aug. 25, 2013
Viral message claims President Obama's finance team plans to impose a 1% transaction tax on all bank transactions, including personal bank deposits.

Description: Viral rumor
Circulating since: Aug. 2010
Status: False (see details below)

Email text contributed by Julie P., Sep. 8, 2010:

Fw: 1% tax on all bank transactions.

One percent transaction tax is proposed President Obama's finance team is recommending a transaction tax.

His plan is to sneak it in after the November election to keep it under the radar. This is a 1% tax on all transactions at any financial institution I. e. Banks, Credit Unions, etc.. ANY deposit you make, or move around within your account, I. e. transfer to, will have a 1% tax charged.

If your pay check or your social Security or whatever is direct deposit, 1% tax charged.

If you hand carry a check in to deposit, 1% tax charged,

If you take cash in to deposit, 1% tax charged.

This is from the man who promised that if you make under $250,000 per year, you will not see one penny of new tax.

Keep your eyes and ears open, you will be amazed at what you learn. remember once the tax is there they can raise it at will.

Analysis: This is all quite misleading. It's true that in 2011 a bill was introduced in the House of Representatives, the Debt Free America Act (H.R. 1125), which would have imposed a one percent tax on certain financial transactions -- if passed. It's also true that the bill was introduced by a Democrat, Rep. Chaka Fattah of Pennsylvania (who had introduced more or less the same legislation in 2010 as H.R. 4646).

But the legislation had zero co-sponsors, nor was it ever supported, endorsed, or even acknowledged by the Obama administration.

Moreover, contrary to what's repeatedly claimed in online rumors, personal bank deposits would not have been subject to subject to the tax under the proposed legislation. Section 4501(b)(2) of the 2011 version of the bill (H.R. 1125) reads as follows:

EXCEPTIONS- The term ‘specified transaction’ shall not include--
(A) any transfer between accounts of the taxpayer, and
(B) any deposit into a personal account of an individual.

Like every previous iteration of the Debt Free America Act, the 2011 version was never voted on, let alone passed by Congress.

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Sources and further reading:

Democratic Lawmaker Points Fiscal Reform Commission to a Solution for Eliminating the National Debt
U.S. House, website of Rep. Chaka Fattah, 22 February 2010

H.R. 4646: Debt Free America Act
Text of the 2010 version of the bill on GovTrack.us

H.R. 1125: Debt Free America Act
Text of the 2011 version of the bill on GovTrack.us

Details of the Proposed 1 Percent Transaction Tax
About.com: U.S. Gov't Info, 11 September 2010

1% Transaction Tax
FactCheck.org, 8 September 2010

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