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Forums » Politics & Society » Government & Elections » Bridging The Fiscal Cliff: A Wall Street Sales Tax
Bridging The Fiscal Cliff: A Wall Street Sales Tax
posted at August 8, 2013 1:26 PM EDT
First: June 3, 2013
Last: October 13, 2013
Day after day, day after day,
According to the latest reactionary brainwash scheme turned corporate media narrative America has a "spending problem." We spend too much on taking care of people (stop laughing rest of the developed world) and therefore we have to go on a severe diet of austerity to enrich Wall Street banksters restore fiscal sanity. Because if we do not rich people and their friends the global bond market will punish us with fire and brimstone - like vigilantes they will say "make my day" and years later relive their glory by cursing at an empty chair.
But the question arises when considering government deficits - aren't there two sides to deficits? Is not another way to balance a budget to increase revenues?
The response from the reactionaries in Congress is no new revenues, period. Taxation is theft! You looting moochers! Stop spending taxpayer money, unless it's for military contractors who donate to our campaigns! You'll kill the economy with new taxes, actually with existing taxes, speaking of which how about another tax cut?
In short, while there are revenue sources everywhere, none can be used to balance the budget.
The more reasonable of the lot point out that ending the Bush tax cuts will not make up the shortfall so deep cuts are necessary regardless. While it is true that just restoring the Clinton-era tax levels for higher income earners will not be enough to balance the budget there is another revenue stream that would not only be fair but productive to tap into - Wall Street. It is time for a financial transaction tax.
A financial transaction tax has numerous benefits but let's talk about the most relevant one. Revenue.
According to a report by Political Economy Research Institute of the University of Massachusetts a financial transaction tax would bring in roughly $350 billion in revenue annually. Enough revenue to maintain the massive defense budget, if that's something you are into.
And since we are talking about Wall Street let me move past greed to fear to offer another benefit of taxing sales on Wall Street - financial stability.
James Tobin, a Nobel-Prize winning economist, suggested levying a tax on speculative activity in the global currency market. A tax, Tobin believed, would help curb dangerous speculation such as occurred in Mexico, East Asia, and Russia in the 1990s. By exacting a cost on speculative activity the incentive to destabilize markets/countries through quick flows of money would be reduced as longer term investment would become more lucrative by contrast.
Curbing dangerous speculation was also the motive for one of the first proponents of the financial transaction tax, John Maynard Keynes, who wrote:
Speculators may do no harm as bubbles on a steady stream of enterprise. But the situation is serious when enterprise becomes the bubble on a whirlpool of speculation...
The introduction of a substantial government transfer tax on all transactions might prove the most serviceable reform available, with a view to mitigating the predominance of speculation over enterprise in the United States.
Would the crash of 2008 have happened had there been a financial transaction tax on derivatives? Could a future financial crisis be averted by dampening speculative activity?
It is difficult to determine the positive effects of a financial transactions tax beyond revenue collection despite strong logic that it would reduce speculation - what is easy to determine is the lack of downside.
The Wall Street rejoinder to this tax proposal will surely be that it will hurt investment, and let me tell you right now why that is total bull - America once had a financial transactions tax.
Not only did America have a financial transactions tax, from 1914-1966, but the highest period of growth in American history occurred with it in place. If the tax hurt investment no one told the economy.
But putting aside any ancillary benefits, this is a tax that will collect needed revenues. If this revenue is not collected cuts to vital social programs will have to take place or be exacerbated. Social Security, Medicare, Medicaid, education assistance, anti-poverty programs - all on the chopping block without this revenue to make up the difference.
Budgets are about choices and priorities, they demonstrate our values. So what are our values? Should the poor suffer more, should we break our promises to seniors, or should speculators face a minor tax that may make them think twice about blowing bubbles?
The choice is up to you.
Re: Bridging The Fiscal Cliff: A Wall Street Sales Tax
posted at August 9, 2013 11:52 PM EDT
Re: Bridging The Fiscal Cliff: A Wall Street Sales Tax
posted at August 23, 2013 10:47 AM EDT
First: September 16, 2011
Last: December 5, 2013
In Response to Re: Bridging The Fiscal Cliff: A Wall Street Sales Tax:
Let's just say that things were much better before Bush took office, though this senseless idea that "tax cuts" help everyone started under Reagan. It accelerated under Bush when we were being told that we needed a "tax cut" right after he took office. Yet, how were Bush/Cheney going to pay for them while becoming involved in a decade and more of 2 very costly wars? Why were the corporations outsourcing jobs creating a flood of unemployment while, at the same time, promoting home ownership for just about everyone? After the Bush administration, the reality of the debt that they caused came into focus. However, it was blamed on "entitlements", especially those that seniors depend on for health care and retirement. It just seems that all this "tax evasion" by the wealthy seemed to undermine what was once a financially secure society for middle and working class Americans. The idea that big corporations need "tax cuts" to create jobs is total nonsense as they're doing very well with their investments in foreign countries. I'm not a financial wizard, but it just seems that we were never given any good explanations why the financial collapse of 2008 happened.
Posted by intersan
It is time we looked at how we bring fairness back into the tax system. Good discussion .
Corporations are not paying their fair share, but, they are being allowed to do this. Our government is not looking at this carefully yet. But, someone needs to.
Remember GE paid no taxes?
They weren't the only ones getting corporate welfare. And,until we have representatives who are willing to change this , we will continue to support corporations , while the average American is paying over 25%
Corporate Welfare from the IRS