Peter Guidi's Blog

“Taxing” the “Hidden Tax”; will Politicians take aim at interchange as a new source of government revenue?

In alternative payment, credit card, debit card, interchange, payment on October 8, 2009 at 12:37 am

Erwin N. Griswold  said “We have long had death and taxes as the two standards of inevitability. But there are those who believe that death is the preferable of the two.”  At least,” as one man said, “there’s one advantage about death; it doesn’t get worse every time Congress meets.”  Democratic Representatives Peter Welch of Vermont and Zoe Lofgren of California have sponsored legislation aimed at clamping down on interchange fees.  Enter into this debate a new proposal that suggests the creation of a new “Natural Disaster Trust Fund” funded with what?  You guessed it; a tax on interchange fees.  

If there is anything Congress likes more than the donations of important special interest groups, it’s a new source of revenue. This is the perfect storm for an idea like this; a regulation happy Congress, a huge source of money, conflicting information from two major industries and a compelling need for another major government program.  Improbable you say?  Hardly.

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