I not sure what we paid the members of the Deficit Commission, but I offer my recommendations absolutely free.
I cannot take full credit for the first idea expressed here. I believe Ralph Nader and others have proposed similar if not identical proposals. The essence of the proposal is a fee (call it a tax if you must) on every single transaction made in the stock market. Those that trade stocks and and other securities cannot complain about this since they already pay brokers fees to conduct these transactions already. I'm simply recommending a small fee or 0.5 - 1.0% be charged on every transaction. Pretty simple, sell $10,000 worth of securities pay a $50 - $100 fee. Charge the fee either on the buy side or sell side or both.
Here are the numbers:
According to the NY Stock Exchange's data for 2009 the number of shares traded was 549.3 Billion shares, in 2 billion transactions for a total of 11.76 TRILLION dollars.
The revenue generated by this fee would be in the range of 58.8 - 117.6 BILLION dollars ANNUALLY.
These numbers reflect only transactions conducted on the NY Stock Exchange. Add to these figures volume and values generated for other exchanges like NASDAQ, which I believe has even higher volumes.
The revenue from this fee will be used solely to pay down the debt.
The fee creates the same tax burden for the Middle Class as it does for the rich and Corporations. We in the middle class participate in the debt reduction process through our 401k and IRA accounts. Stock traders of ALL income levels are treated equally. Mutual Funds, ETF's and hedge funds contribute also.
My other idea has to do with capital gains. This seem to be a contention for all regarding the decision whether or not to extend the Bush tax cuts. Rather than having a flat capital gains tax rate, I propose a graduated rate and allowed deduction for losses based on how long the security was held.
For example:
Security Held for Less than 3 months gain is taxed at the greater of the personal rate or 40%. If held 3 months to one year taxed at personal rate. If held 1-3 years taxed at the lesser of current rate of 15% or personal rate. If held for more than 3 years ZERO capital gains tax
As far as writing off losses as similar proposal. Security held less that 3 months only 25% of loss allowed to be written off. 3 months to 1 year 50%, 1-3 years 75% and over 3 years 100%.
This I believe may reduce stock market volatility making it more advantageous to hold on to your investments like our parents and grandparent did rather than gambling in the casino that has been created and thrives in today's world.
So Mr President as I said before these suggestions are absolutely free and I feel will help a lot more in the future of America than cutting off vital programs that are needed for the vast majority of our citizens