Are you WILLINGLY paying a 3% tax?

Are you WILLINGLY paying a 3% tax?  Are you then paying this money so that it can leave your community, so it can be shipped to tax havens abroad and to pay for the bonuses of bankers and the Wall Street types?

The unfortunate answer is that you probably are. With 609 million credit cards(1) being held by US consumers and with credit cards being used for more than $2.5 trillion(2) in transactions every year  you are probably using credit cards for many of your purchases. Did you know that credit card companies charge their merchants a fee of approximately 3% of every transaction? This is on top of minimum monthly fees, gateway fees, statement fees, and address verification fees. The money from these fees goes to pay bonuses for the top bankers. The amounts of these bonuses actually exceed the profits that these banks make.

So, in the end who really has to pay these fees? Does the merchant absorb them or pass them on to the customers?

In this difficult economy, most merchants operate on very tight margins and they cannot afford to absorb these fees, so they are passed on to their customer. This means that everything you buy has an extra 3% tacked onto the selling price. So, even if you are paying in cash, you are probably still being charged the extra 3% because so many others pay using credit cards. You are essentially paying a 3% BANK TAX for every purchase you make because of this. So no wonder the banks are doing well in this depressed economy: 3% of $2.5 trillion is a lot of money, and this does not count any interest, late fees, annual fees, and other fees that YOU pay to the credit card companies. No wonder some of the largest buildings in our cities are banks. These large banks are not producing anything, they create no wealth (except for themselves). They are parasites on the working people who place themselves in close proximity to large piles of workers’ money and find ways to siphon off as much as possible for themselves in the way of  bonuses and money to be used to “buy” legislation that will provide loopholes in the tax code so they can keep even more money for themselves.

The banks are not the only ones that are siphoning money from your community. The big corporations are also doing the same. When you do your shopping at a large chain store, they do provide jobs that basically minimum wage, while they take the profits and ship it out to the central offices and out of the community. Since 2 out of 3 corporations pay no federal taxes, this means that YOU are paying for their police protection, fire protection,  and for the wars that profit them. Much of this money is also sent out of the country to avoid paying their fair share in taxes which impoverishes not only your community, but your nation as well.

So what can you do to stop your money from leaving your community and enriching the elites?

FIRST: Consider this, do you get upset when you go to a gas station and they charge you more for a credit card purchase as opposed to a cash purchase? Do you get upset with a merchant if they charge you extra if you pay by credit rather than with cash? These vendors are actually doing you a favor and passing the savings on to you for paying in cash instead of pocketing the extra money. Seek out these vendors and give them your business. Thank them for allowing you to save money by passing the cash savings to you. If your merchant does not give you a cash “discount”, ask them why not. Tell them you will purchase elsewhere if they do not.

SECOND: Pay with cash whenever possible. This denies the big banks the money for all of these fees and keeps it in your pocket and in your community. Tell your family, your neighbors, your friends to do the same thing. If we could collectively cut our credit card spending in half, this alone would save us $37 billion that would be kept in our pockets and in our communities. This would be an essentially “free stimulus” for our communities, rather than having the banks siphon this cash from our communities.

THIRD: Purchase as much as possible from smaller local merchants, rather than large corporations, huge chain stores, large franchises, and large banks. Buy from your local hardware store rather than going to Home Depot. Buy from your local clothing store rather at Walmart. Drink a local beer rather than Budweiser. Buy your food from your local farmer when possible. Buy your flower bulbs from the grandmother next door rather from mailorder. These banks and corporations take their profits and also ship it out of our communities where they use the money for “productive” things like executive bonuses. Your local bank, your local restaurant, your local hardware store will keep that money in your community rather than shipping it out. This helps to stimulate the local economy and has a ripple effect as the money circulates locally. The job you save may be your own.

FOURTH: Become aware of which corporations are the large contributors to political campaigns and lobbyists. These corporations use this money to lobby our elected leaders to add to the 71,000 page tax code to insert tax breaks that benefit them, leaving the rest of us to pay the services they receive, such as roads, police, fire, military protection. If they are not paying for these services, YOU ARE! Roads and military protection do not come cheap! This shirking of their duty, results in even more money leaving our communities which impoverishes them even more. The Wall St speculators and bankers are thriving in this environment, while Main Street suffers. Avoid buying from these large entities, and instead buy from the local merchants who are not buying our politicians and are paying their fair share of taxes.

FIFTH: Check out what the organization US Uncut is doing. These people are aware of the scale of theft that is taking place and how the result is draconian program cuts to ostensibly cut the deficit, but in reality is really of transfer of money from those who need it the most to those who need it the least in the form of tax cuts for the wealthiest. Our nation is actually debating cutting early childhood education, forcing veterans into homelessness, and cutting food aid to pregnant women and children, while giving tax breaks to billionaires, the banks, the speculators, and the big corporations. This is just plain wrong!

With so many of our fellow citizens unemployed, underemployed, or just worried about keeping the job they have, we need to take these simple steps to start protecting our communities and ourselves from the greed of these financial elites and to VOTE WITH OUR WALLETS!

(1)”The Survey of Consumer Payment Choice”, Federal Reserve Bank of Boston, (January 2010)

(2)American Bankers Association, (March 2009)