Skip to main content

At least that's what a writer at Alternet thinks, among others ...

The tax that could save America from Wall Street

The financial transaction tax is simple, fair, widely supported by the public and long overdue

by Lynn Stuart Parramore, AlterNet; -- Oct 18, 2013

It’s a simple tweak that would reign in an out-of-control financial sector, stimulate jobs, generate billions of revenue, and possibly prevent another heart-wrenching crisis. Nobel Prize-winning economists like Joseph Stiglitz and Paul Krugman want it. Billionaires like Warren Buffett and Bill Gates want it. Polls show the majority of Americans want it. Even the Pope wants it.

We’re talking about a financial transaction tax (FTT) -- a tiny tax of, say, less than half a percent: maybe 3 cents per $100 -- on Wall Street trading. It’s simple, more than fair, widely supported by the public, and long overdue.

OK, you got my attention.  What is a financial transaction tax (FTT)?

And how does it encourage Wall Street to invest in the long-term, instead of simply profiting from the market's short-term volatility, with thousands of trades per day?

Financial transaction tax --

A financial transaction tax is a levy placed on a specific type of monetary transaction for a particular purpose. The concept has been most commonly associated with the financial sector; it is not usually considered to include consumption taxes paid by consumers.[1]

A transaction tax is not a levy on financial institutions per se; rather, it is charged only on the specific transactions that are designated as taxable. So if an institution never carries out the taxable transaction, then it will never be subject to the transaction tax.[2] Furthermore, if an institution carries out only one such transaction, then it will only be taxed for that one transaction. As such, this tax is neither a financial activities tax, nor a "bank tax",[3] for example. This clarification is important in discussions about using a financial transaction tax as a tool to selectively discourage excessive speculation without discouraging any other activity (as John Maynard Keynes originally envisioned it in 1936).[4]

As that writer at Alternet summarized the observations from Forbes, sometimes even financial markets need some 'checks and balances' -- for the sake of us all, in the wider overall American economy ...

As Jeremy Scott of Forbes put it: “What is important is that the financial sector, which bears a disproportionate share of the blame for the deep recession that is still affecting employment and growth, share in the costs of insuring against future bailouts and be forced to restructure itself to better insulate the rest of the economy from excessive risk.”

Too bad for us average Americans relying on Main Street, that lack of growth and chronic under-employment affects us much more, than those who "transact" their economic growth, on a market full of "excessive risks."

Too bad for us average Americans, when Wall Street's "excessive speculation" goes unchecked, and eventually goes bad -- guess who ultimately picks up their tab?

We'd be wise to constantly remind them of this, and this little Bailout call TARP. We'd be wise now to realize that a serious FTT would have likely sidestepped that whole sad chapter in American lackluster economic growth, and the recent ongoing stunning lack there of.

The proposed bill Let Wall Street Pay for the Restoration of Main Street Bill is officially contained in the United States House of Representatives bill entitled H.R. 4191:
[... Its ] projected annual revenue is $150 billion per year, half of which would go towards deficit reduction and half of which would go towards job promotion activities.[3]
Sounds only fair, eh?

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

skybluewater, SME in Seattle, paradox, Mimikatz, Sylv, chuck utzman, nota bene, chrississippi, PrahaPartizan, Chi, lapin, samizdat, grollen, teacherken, glitterscale, native, Gooserock, Shockwave, Pescadero Bill, cotterperson, eeff, HootieMcBoob, Woody, MarkInSanFran, exNYinTX, Zinman, 88kathy, TracieLynn, cyberKosFan, Einsteinia, BlackSheep1, susakinovember, KMc, chuckvw, Minerva, roses, Bronxist, Nate Roberts, Terre, splashy, dksbook, wader, psnyder, NYC Sophia, pat bunny, White Buffalo, Hawksana, Catte Nappe, Curt Matlock, randallt, solesse413, Josiah Bartlett, rmx2630, sebastianguy99, Gowrie Gal, rapala, Bluesee, NoMoreLies, SherwoodB, irate, Flint, run around, craigkg, dewtx, ChemBob, stagemom, YucatanMan, reflectionsv37, fixxit, bleeding blue, Dem Beans, where4art, Kayakbiker, Rex Freedom, Tool, spunhard, Savvy813, WisePiper, bunsk, bookwoman, CentralMass, Jim R, Jim P, martini, K S LaVida, esquimaux, tarheelblue, cybersaur, Mr Bojangles, tobendaro, Themistoclea, SciFiGuy, seefleur, arlene, NBBooks, MJ via Chicago, StrayCat, The Hindsight Times, Preston S, middleagedhousewife, llbear, onionjim, CA Nana, Clive all hat no horse Rodeo, Aaa T Tudeattack, cpresley, Sapere aude, marykk, dotsright, Joe Archaeologist, Habitat Vic, camlbacker, Debs2, offgrid, linkage, bnasley, Kentucky Kid, carpunder, Chico David RN, madgranny, skod, JML9999, bobinalaska, TomP, GideonAB, JDWolverton, Mr SeeMore, hulagirl, rudyblues, OleHippieChick, Involuntary Exile, tvdude, elwior, Judeling, jakebob, Lujane, tofumagoo, pickandshovel, No Exit, Nica24, palantir, Mayfly, toom, watercarrier4diogenes, squarewheel, LaFeminista, prettygirlxoxoxo, J M F, spacecadet1, divineorder, bsmechanic, CanyonWren, Ohiodem1, petral, elziax, asym, kevinpdx, Keith Pickering, histOries Marko, stevenwag, sfarkash, Lacy LaPlante, Larsstephens, Words In Action, Lefty Ladig, ruscle, Railfan, NJpeach, Polly Syllabic, dagnome, gulfgal98, tb mare, ItsSimpleSimon, Puddytat, Jaimas, Publius2008, slice, Quantumlogic, annieli, allenjo, ozsea1, Liberal Capitalist, tosimmonds, Bob Duck, slowbutsure, Hatrax, SoCaliana, Jasonhouse, LSmith, bluedust, poliwrangler, VTCC73, bakeneko, Miggles, Auriandra, BlueDragon, BocaBlue, anodnhajo, Jakkalbessie, Eric Nelson, rustypatina, winglion, a2nite, CA ridebalanced, Mr Robert, peachcreek, whizdom, MartyM, burnt out, Buckeye54, oldpotsmuggler, AverageJoe42, Glen The Plumber, CalBearMom, Heavy Mettle, Chaddiwicker, Dallas L, Illinois IRV, countwebb, eyo, goodpractice, HedwigKos, Drocedus, Icicle68, nice marmot, Hey338Too, skepticalcitizen, RUNDOWN, Dodgerdog1, eagleray, patbahn, gnosticator, jrand, Gurnt, theBreeze, Pablo Bocanegra, GleninCA, Seanryan, CJB2012, Social Contract

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site