Let's face it. We've lost elections in 1984, 1988, 2000, and 2004 in part because of the public's perception that Democrats tend to raise taxes. Never mind that the Clinton tax raises in 1993 corresponded with a huge economic boom; the GOP claims that it would have been even bigger without that increase and that the '90s boom really stemmed from the Reagan tax cuts of 1981.
Now we have some GOP candidates proposing what they call "consumption taxes"--sales taxes on expenditures, the most regressive taxes imaginable. Poor people who spend 100% of their income paying bills, buying clothes and food for their kids and families would be taxed on 100%
of their incomes.
The vast majority of stocks and bonds transactions are institutional, and "tax incidence" models may suggest that the costs are simply incorporated into the costs of the transactions and passed on to the customer.
I have written here previously about how sales tax reform in some states might benefit statewide candidates. (Many New England states exempt clothing items up to a certain amount per item, etc., yet some of the "red states" charge high sales taxes on everything.) This ought to be a winning issue in those red states. I bet that some "red staters" may be surprised to find out that New Englanders--what some here in Texas used to call residents of "Taxachusetts"--in fact may pay less in taxes of the regressive kind.
But while I agree that payroll taxes should be revised upward such that those making more than the current maximum, just under 100K, should pay, and I would also argue that there should be an exemption for, say, the first 30K of income, what is wrong with a sales tax on stocks and bonds transactions?
Wall Street will oppose it? So what? Wall Street does better under Democrats. FDR explicitly welcomed Wall Street's hostility.
Nader proposed this several years ago. It's painless, would also apply to these "golden parachute" deals, and could raise a lot of revenue. Think of the populist appeal: "You pay sales tax when you buy your kid a coat to keep him warm." Why shouldn't people pay a similar tax when all they are doing is trying to get richer?"
I'm not really sure how the GOP candidates would respond to this. What's the best they could say? That's it is another tax on gambling?