Social Security Direct Deposit Tax Email A Fraud

Yesterday, I was forwarded the following email, with a note asking me if I planned to comment on it:

Hey you, here comes Chaka Fatta. Hopefully this will not pass, but if it does, we will have a 1% on all credit card charges.



Subject: HR 4646

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Be sure to read entire explanation

Watch for this AFTER November elections; remember this BEFORE you VOTE, in case you think GOV. is looking out for your best interest.

A 1% tax on all bank transactions is what HR 4646 calls for.

Do you receive a paycheck, or a retirement check from Social Security or a pension fund and have it direct deposit??

Well guess what … It looks as if Gov. wants to tax it 1% !!!

This bill was put forth by Rep. Chaka Fattah (D-PA).

YES, that is 1% tax on all bank transactions – HR 4646, every time it goes in and every time money goes out.

Ask your congressperson to vote NO.


[repetitive bits deleted for the sake of brevity]

Remember, any money, cash, check or whatever, no matter where it came from, you will pay a 1% fee if you put it in the bank.

Some will say, oh well, it’s just 1%. Are you kidding me? It’s a 1% tax increase across the board. Remember, once the tax is there, they can also raise it at will. And if anyone protests, they will just say, “Oh, that’s not really a tax, it’s a user fee”!

Think this is no big deal? Go back and look at the transactions you made from last year’s banking statements. Then add the total of all those transactions and deduct 1%. Still think it’s no big deal?

So yeah, I’ll comment.

The email is wrong. It’s wrong on a bazillion levels. It’s yet another poorly researched, heavily politicked hoax email.

Here’s the real scoop:

Yes, it is true that the Treasury Department will begin phasing out paper checks. And yes, federal benefit recipients, including those who receive Social Security, will be required to either get their payments by direct deposit or in the form of a prepaid, rechargeable debit card (it will be a MasterCard®). The switch has to take place in about a year, on March 1, 2013 (and not January 2013). If you’re already using direct deposit, nothing will change.

The switch is intended to save tax dollars; paper checks currently cost taxpayers nearly $120 million. That number is expected to dramatically increase as the number of baby boomers nearing retirement age explodes. Some estimates take the savings up to a billion, though I’m not sure how accurate that really is.

That new rule, though, has zero to do with H.R. 4646.

H.R. 4646, referred to as the Debt Free America Act, is a bill introduced by Rep. Chaka Fattah (D-PA) in 2010 (read the full text here). Rep. Fattah has introduced a variation on this bill for a number of years now; you can read about it on his web site. None of those variations has gone further than committee.

As written, the bill would eventually eliminate the current individual federal income tax; the target date for that under the 2010 version of the bill was 2017. It would be replaced by a new 1% tax on all financial transactions. This would include any transactions paid by check, cash, credit card, transfer of stocks, bonds, or other financial instrument. The result of the bill, according to Fattah, would be the elimination of the national debt within just seven years.

It’s clearly a controversial bill. And because of that, despite what was represented in variations on the email, the bill has not attracted any co-sponsors. None. Not one. Not Pelosi (D-CA). Not Harkins (D-IA). Not DeFazio (D-OR). Not *fill in the blank here with Congressional Representative of your choice.* None.

It hasn’t passed. It is in no danger of passing. Since February of 2010, H.R. 4646 has been siting in committee where, mark my word, it will die.

No one will even stand up and say they like it, President Obama included. Despite variations of the email which say otherwise, President Obama does not support, and has not supported, the bill.

In fact, the closest anyone has come to supporting the bill was a similar bill which was proposed in the Senate by Sen. John Ensign (R-NV). That bill, S. 2965, is similarly sitting in committee, as it has since January 2010. It also has no co-sponsors and worse yet, no sponsor. Sen. Ensign resigned last year after facing allegations of ethics violations related to a sex scandal.

So there you have it.

If you see one of these emails and aren’t sure whether to believe it, try to find the original text of the bill in question (in full, not an abstract). You can always find out what bills your Congressional officials author and support by checking the Library of Congress database or Open Congress.

For the Reader’s Digest version of these types of emails, you can also check out or I prefer, however, to read the official text and Congressional actions on the bills to get the bigger picture. And don’t rely on the little note from your friend – or your friend’s friend – or your friend’s friend’s friend – or whoever sent the chain email to you in the first place swearing that they checked it out on before passing it along. They probably didn’t.

The opinions expressed are solely those of the author and do not necessarily reflect the views of XFINITY.

The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
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