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H.R. 1125 (112th): Debt Free America Act

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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Mar 16, 2011.

Debt Free America Act - States as purposes of this Act the raising of sufficient revenue from a fee on transactions to: (1) eliminate the national debt within 10 years and phase out the individual income tax, including interest payments on the national debt; and (2) provide incentives for private sector investment in capital goods, clean energy generation, and infrastructure development.

Amends the Internal Revenue Code to impose a 1% fee, offset by a corresponding nonrefundable income tax credit, on every specified transaction that uses a payment instrument, including any check, cash, credit card, transfer of stock, bonds, or other financial instrument. Defines "specified transaction" to: (1) exclude any deposit into a personal account of an individual and any transfer between accounts, and (2) include retail and wholesale sales, purchases of intermediate goods, and financial and intangible transactions.

Establishes in the legislative branch the Bipartisan Task Force for Responsible Fiscal Action to review the fiscal imbalance of the federal government and make recommendations to improve such imbalance. Provides for expedited consideration by Congress of Task Force recommendations.

Repeals after 2021 the individual income tax, refundable and nonrefundable personal tax credits, and the alternative minimum tax (AMT) on individuals.

Directs the Secretary of the Treasury to: (1) prioritize the repayment of the national debt to protect the fiscal stability of the United States; and (2) study and report to Congress on the implementation of this Act.