Guest Post: Boiling Frog Alert: Congress Wants Automatic Wage Deductions To Pay Down The Debt

Tyler Durden's picture

From Simon Black of Sovereign Man

Boiling Frog Alert: Congress Wants Automatic Wage Deductions To Pay Down The Debt

Folks… you just can’t make this stuff up.

On July 6th, just two days ago, at least a dozen busybody Congressmen sponsored the introduction of HR 2411, the “Reduce America’s Debt Now Act of 2011.”
They always come up with fantastic names for these pieces of
legislation… and rest assured, the better/more patriotic the name, the
more ominous the bill. This one follows the pattern.

HR 2411 states that every worker in America should be able to
voluntarily have a portion of his/her wages automatically withheld and
sent directly to the Treasury Department for the purposes of paying down
the federal debt.

Every employer making payment of wages shall deduct and
withhold upon such wages any amounts so elected, and shall pay such
amounts over to the Secretary of the Treasury…

That’s right. Uncle Sam is so broke that he wants to give all the
good little Americans out there the opportunity to contribute an even
greater portion of their paychecks to finance government largess.

Desperate? Hmmm…. Don’t worry, it gets better.

Obviously, if an employee feels so compelled and should elect to have
a portion of his/her paycheck withheld, the onus of responsibility is
now on the employer to make it happen. The employer has to do all the
paperwork, withhold the money, send the payment to the Treasury,
maintain the account records, and probably submit to all kinds of new
filing requirements.

You can imagine that, if passed, the bill will result in a host of
new IRS regulations, complete with a battery of penalties for employers
who don’t fill out the paperwork properly, submit filings on time, or
make some administrative mistake.

Think about it: if a small business owner has one single employee who
is dumb enough to think that it’s his patriotic duty to pay down the
debt and decides to contribute $1/month, that owner will have the
responsibility for all kinds of new forms and filings, plus submit to
new ‘debt reduction audits.’

But don’t worry, it gets even better.

So let’s say there are millions of sheep out there who elect to
donate a portion of their toil and sweat so that the Chinese and big
financial institutions don’t have to worry about an American default.
How does Congress plan on rewarding its most patriotic citizens? By
sticking it to them on their taxes, of course.

HR 2411 stipulates that any contribution made to the Treasury in order to pay down the federal debt IS NOT TAX DEDUCTIBLE.

“The [Treasury] Secretary shall include. . . a reasonably conspicuous
statement that any amounts deducted and withheld from wages. . .  are
not deductible as charitable contributions for Federal income tax

Imagine this scenario: You make $100,000/year. In a fit of complete
insanity, you decide that you want to withhold your entire annual salary
to pay down the debt. Hey, you can always move in with mom for the next
year, right?

Well guess what– Uncle Sam will gladly take your money… and then
STILL expect you to pay taxes on the $100,000 that you earned, so you’d
have to come out of pocket with an additional $40,000 or so.

Don’t worry, though. The Social Security and Medicare wages are
reduced by the amount that you withhold, making you only liable for
state and federal taxes. Seems like a good deal, eh comrades?

There are so many things utterly wrong with his piece of legislation,
it’s hard to know where to begin other than by saying that such
intellectual and philosophical perversion is only capable of springing
from unprincipled sociopaths whose sole capability is the destruction of

There’s a great quote from Atlas Shrugged that comes to mind which sums this all up:

[W]hen you see that in order to produce, you need to obtain
permission from men who produce nothing; when you see that money is
flowing to those who deal not in goods, but in favors; when you see that
men get rich more easily by graft than by work, and your laws no longer
protect you against them, but protect them against you. . . you may
know that your society is doomed.

We’ve discussed the story of the boiling frog so many times before– a
frog, when put into a pot of water and slowly brought to a boil,
doesn’t realize that he’s in danger until its too late. I think the
boiling frog just got a little hotter. Have you hit your breaking point yet?

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Pladizow's picture

Do everything you can to get your money out of the US!

max2205's picture

Yep, next a yard sale or car wash, or upcake stand...weeeeeeeeeeeeeeeeeeeeeeeee

TruthInSunshine's picture

Uncle Sam tells each Amerikan (as Bernank lurks in the shadows):

It puts the lotion on its skin or else it gets the hose again.

Nathan Muir's picture

I needed that laugh on this Friday!  On a side note, I tell every proponent of tax increases I know, the IRS lets you mail in extra cash right now, feel free to cut the check.  Funny, I've never ran into a taker.

FEDbuster's picture

What's next a "Secret Santa tree" for the military?

Bicycle Repairman's picture

I think they already have a similar program in place.  It's called FICA.


the mad hatter's picture

Congress: morally bankrupt since 1913.

then: we'll unconstituationally authorize a war as long as we send your kid. now: we'll pay down our drunken sailor spending sprees with your hard earned cash and not ours. future: we're going to repeal the 3rd amendment, make ourselves at home in your house, fuck your wife, and eat your kids while you watch.

how the hell do these a-holes get elected in the first place?

Fukushima Sam's picture

T Rowe Price manages my employer's 401k program.  I just got a letter from them saying that starting August 1 I would be "automatically enrolled" in a 3% deduction for the plan "even if I previously elected not to participate."  Naturally the wording of the letter was about how lucky I was that they made this so easy on me.

This smacks of desperation.  Not sure if this descision is my employer's, or the plan, or if .gov needs to siphon more earnings into the 401ks before confiscating them, but it is very strange.

MsCreant's picture

I hope you can unenroll. 

DaveyJones's picture

is congress eligible for this deduction?

DoChenRollingBearing's picture

This what things look like when they get completely out of control.

Shut down your 401ks and your IRAs.  Then buy some gold.  Get to at least 5% (better 10% or more) of your net worth in gold.

Disclosure: I am at 12%, so yeah, I am talking my book a but here.

Fish Gone Bad's picture








This is so very sad.  It is like they are not even trying any more.






nope-1004's picture

I'm sure mr. weasel head Tim Geithner had some input in this bill.  After all, who else is so inclined and adept at confiscating public funds and usurping private security?

USA is going down.  We're all watching it in real time.

F'in A.



chumbawamba's picture

America is the best country in the world.

I am Chumbawamba.

AssFire's picture

Yes and I love Norwegian flash mobs.. [hint Norewgian= Nigger]

So that is the new term.. God Dam Norwegians! see it's great

Pez's picture

You say you want a revolution
Well, you know
We all want to change the world
You tell me that it's evolution
Well, you know
We all want to change the world
But when you talk about destruction
Don't you know that you can count me out
Don't you know it's gonna be all right
all right, all right

You say you got a real solution
Well, you know
We'd all love to see the plan
You ask me for a contribution
Well, you know
We're doing what we can
But when you want money
for people with minds that hate
All I can tell is brother you have to wait
Don't you know it's gonna be all right
all right, all right

ah, ah, ah, ah, ah...

You say you'll change the constitution
Well, you know
We all want to change your head
You tell me it's the institution
Well, you know
You better free you mind instead
But if you go carrying pictures of chairman Mao
You ain't going to make it with anyone anyhow
Don't you know it's gonna be all right
all right, all right
all right, all right, all right
all right, all right, all right

Haywood Jablowme's picture

Nah, these following lyrics are more suitable since the american sheeple have no balls to revolt.....


Title: The Beatles - Taxman lyrics

One, two, three, four...
One, two, (one, two, three, four!)

Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.

(if you drive a car, car;) - I’ll tax the street;
(if you try to sit, sit;) - I’ll tax your seat;
(if you get too cold, cold;) - I’ll tax the heat;
(if you take a walk, walk;) - I'll tax your feet.


'Cause I’m the taxman,
Yeah, I’m the taxman.

Don't ask me what I want it for, (ah-ah, mister Wilson)
If you don't want to pay some more. (ah-ah, mister heath)
'Cause I’m the taxman,
Yeah, I’m the taxman.

Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
'Cause I’m the taxman,
Yeah, I’m the taxman.

And you're working for no one but me.


Mr Lennon Hendrix's picture





But the fool on the Hill, sees the sun going down, and the eyes in his head, see the world spinning 'round!

4horse's picture

Have you seen the bigger piggies
In their starched white shirts
You will find the bigger piggies
Stirring up the dirt
And they always have clean shirts to play around in.

And in their styes with all their backing
They don't care what goes on around
And in their eyes there's something lacking
What they need's a damm good whacking.

Everywhere there's lots of piggies
Living piggy lives
You can see them out for dinner
With their piggy wives
Clutching forks and knives to eat their bacon.

pupton's picture

AssFire, the correct new PC term for "Niggers" is "young people". You could also substitute "youths", "teens", or make up your own extraordinarily vague term that gives the reader no idea that the attackers are really just a herd of niggers.

nmewn's picture


"America is the best country in the world."

LOL!...we may be going to hell in a basket, but at least I'm enjoyin the ride ;-)

Sudden Debt's picture

IT's not the First time the US did this. They also did it during WO II to fund the war and stopped it in 1945.


And as far as i know, the US is still at war with a few countries :)


markmotive's picture

I'm pretty sure Canada has been doing this for a while now.

BTW - check out David Einhorn's Q2 commentary:

Use of Weapons's picture

The strategic difference you're missing is that last time it was done, both Germany and Japan became industrial powerhouses and balanced the TPTB's books. Total rejuvenation.

Afgan? Barring oil pipelines, and the fantasy of untold gold deposits [hello, JP Morgue] and vast poppy production, the country is so fucked that it will never rise again.

Iraq? Ok, so 14 major bases and a bit of oil... nope, that's a pump n dump as well. A decent economy reduced to fuck all. Oh, and if you didn't notice [ref: prior ZH post] - the missing billions went to ex-soviet gangsters operating in Israel. (LOL. If you're clued in, you might want to notice that the two largest Russian mafias are... Jewish. Srsly. I've been to more Bar Mitzvahs than most Rabbi's in Israel).

Bottom line: WWII 'worked' because the losers in the equation became stalwart allies in the Capitalist model [ffs, Japan basically became a US protectorate in terms of econ. modelling - GE reactors, cough, cough, and so on].


This time - there's no more growth.



Fish [global] just died out [+70% of all stocks]. This means --- 2.6 billion people rely on the oceans, and they just ran out.


>> Get a clue.



Hook Line and Sphincter's picture

Become an independent contractor BITCHEZ!

Haywood Jablowme's picture


When, oh when will the dumbed down sheeple stop paying their income taxes???


Sun Tsu's picture

No sheepskin Trojan's where you're going next.......

Haywood Jablowme's picture


Yeah, I prefer latex when I hit the massage parlors after a good day of trading....



Lawrence's picture

Sure, this program is "voluntary" ... for now!

Once they get it established, the payroll deductions will become mandatory.

Petrolia's picture

When people talk of % of net worth in PM's would that be net worth excluding family home ?

I'm up to about 6% of net worth excluding family home. I'd like to go higher but I always worry that TPTB seem to have a never ending box of tools to manipulate the PM prices down.

I'll add that about 85% of the 6% is in  Rest physical.  I've been flying via Dubai quite often recently and I've started buying a couple of 1oz gold coins each time.  It's expensive but I like the anonymity.

A while ago someone here asked about opinions on Goldmoney.  I don't think there were any replies.  I trust them more than any bank but am still not 100% sure the gold is truely allocated.  It's supposed to be but who knows what scams go on in the PM allocation world ?

CompassionateFascist's picture

The sheer effrontery of the scheme dazzles the mind. The gub'mint can have my penny jar...after the cat craps in it.

Zero Govt's picture

do they take 2nd hand clothes, furniture, past its Sell-By date cans of apricots etc?

..if they're that desperate for handouts they could have my old underpants, sports socks and a poster of Farah Fawcet-Majors (i've moved on) and could at least work a bit trying to flog/swap it as i'd rather hold onto my cash thanks

rmsnickers's picture

That is your employer's decision...albeit one that TRP convinced them to do.  Basically, the thought is that some people who don't already contribute will be enrolled and of those enrolled, some will not opt out.  Thus...more contributions for your employer (helps for compliance testing the highly comped guys) and more importantly...more funds managed by TRP to siphon off via expense ratio.

Fucking captcha.

Fukushima Sam's picture

Thanks, that's what I figured.  Got a reminder set to un-enroll the same day!

Critical Path's picture

Got the same wording provided to me, however not from T.Rowe Price but rather Fidelity...


They actually include it in the benefits section, "you will be automatically enrolled at a 3% contribution rate"... no thanks assholes.  I'll keep my money and decided how to invest it myself, ticker symbols: GOLD & SILVER.  Fuck you very much though.

BoeingSpaceliner797's picture

My employer attempted the same thing during my first 60 days after start date.  I opted out as well. 

Sun Tsu's picture

By executive decision of the FED, June 24, 2011, private pension plans shall......

                - Skynet

Remo Williams's picture

How can you be enrolled in something that has not yet made it out of the House?  The bill was introduced to the House, it is not yet law.

Dugald's picture

Because millions of voters believe the hype and BS and don't bother with due diligence as to a candidates ability, its so easy to just cross fingers and pull the lever.

Then when you realise you have a total twat for a rep you get all upset, and its someone else's fault.

snowball777's picture

how the hell do these a-holes get elected in the first place?

You keep driving voters into their open arms with idiotic hyperbole.

DosZap's picture

how the hell do these a-holes get elected in the first place?



Easy!!, the welfare 5th Generation type do it.

Folks the sooner we all realize we have at LEAST two separate countries in the US, the better  understood this crap will be.

Also, it gives you SOME idea of how little these people actually have to do.

Nothing worse than a lawmaker with nothing else to do except produce more inane laws.

Face it, if this is not a major wake up call for shutting off IRA's, and CD's, and 401k's.

I do not know what it will take.I am really surprised that they have not forced folks to cash out of IRA's, and 401k's, to make them pay taxes NOW on current savings,at current tax rates, and leave the principal in to start over again.

A double scoop if you will.

Thomas's picture

These guys rode the short bus to school.