RobertReich.org: A Little Goes a Long Way: Why a Small Tax on Wall Street Trades is a Good Idea

The following is an excellent article written by Robert Reich on the robertreich.org website on August 10, 2017 titled “A Little Goes a Long Way: Why a Small Tax on Wall Street Trades is a Good Idea” and I quote:

“Why a Tax on Wall Street Trades is an Even Better Idea Than You Know”

One of Bernie Sanders’s most important proposals didn’t receive enough attention and should become a law even without a president Sanders. Hillary Clinton should adopt it for her campaign.

It’s a tax on financial transactions.

Putting a small tax on financial transactions would:

1. reduce incentives for high speed trading, insider deal making and short term financial betting. Buying and selling stocks and bonds in order to beat others who are buying stocks and bonds is a giant zero sum game. It wastes countless resources, uses up the talents of some of the nation’s best and brightest and subjects financial markets to unnecessary risk.

2. generate lots of revenue. Even a one tenth of 1% transaction tax would raise $185 billion over 10 years according to the non-partisan Tax Policy Center. It could thereby finance public investments that enlarge the economic pie rather than merely rearranging its slices. Investments like better schools and access to college.

3. it’s fair. After all, Americans pay sales taxes on all sorts of goods and services, yet Wall Street traders pay no sales tax on the stocks and bonds they buy, which helps explain why the financial industry generates about 30% of America’s corporate profits, but pays only about 18% of corporate taxes.

Wall Street’s objections are baloney.

Wall Street says even a small transaction tax on financial transactions would drive trading overseas since financial trades can easily be done elsewhere.

Baloney. The U.K. has had a tax on stock trades for decades, yet remains one of the world’s financial powerhouses. Incidentally, that tax raises about 3 billion pounds yearly. That’s the equivalent of 30 billion in an economy the size of the United States, which is a big help for Britain’s budget. At least 28 other countries also have such a tax and the European Union is well on the way to implementing one.

Wall Street also claims that the tax would burden small investors such as as retirees, business owners and average savers.

Wrong again. The tax wouldn’t be a burden if it reduces the volume and frequency of trading, which is the whole point. In fact, the tax is highly progressive. The Tax Policy Center estimates that 75% of it would be paid by the richest 5th of taxpayers and 40% by the top 1%.

So, why aren’t politicians of all stripes supporting it? Because the financial transactions tax directly threatens a major source of Wall Street’s revenue. And if you hadn’t noticed, the Street uses a portion of its vast revenues to gain political clout. Which may be one of the best reasons for enacting it.”

(ROBERT REICH IS RIGHT, HILLARY CLINTON SHOULD HAVE ADOPTED THE FINANCIAL TRANSACTIONS TAX [ALSO KNOWN AS THE ROBIN HOOD TAX] AS PART OF HER CAMPAIGN.  IT WOULD HAVE HELPED HER COUNTER THE POPULAR CANDIDATE, SEN BERNIE SANDERS, IN HOW HE WAS GOING TO SOLVE THE GROWING DEFICIT AND DEBT PROBLEM.

LaVern Isely, Progressive, Overtaxed, Independent Middle Class Taxpayer and Public Citizen Member and USAF Veteran

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About tim074

I'm a retired dairy farmer that was a member of the National Farmer's Organization (NFO). Before going farming, I spent 4 years in the United States Air Force where I saved up enough money to get my down payment to go farming. I also enjoy writing and reading biographies and I write about myself as well as articles and excerpts I find interesting. I'm specifically interested in finances, particularly in the banking industry because if it wasn't for help from my local Community Bank, I never could have started farming which I was successful at. So, I'm real interested in the Small Business Administration and I know they are the ones creating jobs. I have been a member of Common Cause and am now a member of Public Citizen as well as AARP. I have, in the past, written over 150 articles on the Obama Blog (my.barackobama.com) and I'd like to tie these two sites together. I'm also on Twitter, MySpace and Facebook and find these outlets terrifically interesting particularly what many of these people did concerning the uprising in the Arab world. I believe this is a smaller world than we think it is and my goal is to try to bring people together to live in peace because management needs labor like labor needs management. Up to now, that hasn't been so easy to find.
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