Checkbook Tax is bad? The Progressive Consumption Tax (PCT) is even worse for your bank account

Checkbook tax is bad, but you’ve heard nothing about the future of your checking account if you haven’t heard about the Progressive Consumption Tax that the Obama Debt Commission is considering.... The PCT is supposed to replace the income tax, but not to be confused with the Fair Tax (which is a sales tax). Here is how PCT works: At tax time you state your income. Then you subtract the amount that you have saved and pay tax on the difference (the consumption).

So if you spend all your income – you pay tax on all your income. The more you save the less of your income will be taxed. According to the supporters of the new American Tax – PCT will encourage people to save.

This will also mean that everybody will have to declare all their checking and saving accounts to the IRS to prove the amount of their savings. ..

The government will know not only what you earn as it is today, but how you manage your money. .. Government will only reward you if you are fully transparent about your money with the IRS.

It is not clear if the banks will be required to report your savings to the IRS the way your employees are required to report your earnings. In such system the only way to hide money from Uncle Sam is dig a hole under the pink flamingo in your backyard or deposit it to The Queen Mattress Bank.

If you think this is bad wait until Obama's "debt commission" comes out with it's plan for saving social security and medicare. Here's a hint, the Obama administration realizes that the only place with enough money to make a dent in the problem is the trillions sitting in 401-K's and IRA's across the nation. One of his economic team spilled the beans during the election and was quickly shut up.

There "plan" will be a one time tax of 10% on the total amount in all 401-K's and IRA's. This won't be 10% of what your retirement investment earned during the year, this will be 10% of the ENTIRE investment. So if you have $500,000 say goodbye to $50,000 of it. The administration will push this by saying the economic benefit of paying off the debt in social security and medicare will supercharge economic growth and allow most investors to earn the money back in a couple years. Of course they will also play the "wealth distribution" card and say it's not fair that you have a nice retirement while Tanya the crack whores social security is threatened because she spent her earnings on crack instead of investing for retirement. Of course if you are lucky enough to have your retirement in a union backed 401-K, you will be exempt.

"The more you save the less of your income will be taxed."

So, does this mean that in the winter when my heat and electricity bills go through the roof, I will have to pay more taxes on whatever gets left? (scratching head...)

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