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H.R. 4191 Let Wall Street Pay for the Restoration of Main Street Act And The 1% Temporary Tobin Transparent Total Transaction Tax
Pundits pronounce the Transaction Tax a long shot, as the usual suspect studies financed by Wall Street Bankers and Brokers are again trotted out and widely editorialized with little empirical veracity. In fact, Adam Smith before 1776 verified as Commissioner of Customs that reducing taxes raised tax revenues and productivity.
TT support from such successful investors as Warren Buffett and John Bogle who founded the low-cost efficient Vanguard Funds corrects widely disseminated disinformation. De facto long-existing custodial exchange SEC fees and real estate transfer taxes put to rest specious counter arguments to the TT.
Nobel Laureates Keynes, Tobin, Stiglitz and McFadden supported the Transaction Tax for a fundamental reason. They desired to replace destructive casino speculation with productive free enterprise that balanced the budget. In 1987 and 1989, Clinton Treasury Secretary and President Obama’s Director of the National Economic Council wrote two papers in support of the Transaction Tax, one with his wife.
What better way to prosper all than to allow people to keep 99% of what they produce and grow the real economy, thus increasing the tax base?
Please note that while I support the Transaction Tax, I think Congress may be thinking too small for once. How would Congress really like to Save and Serve America with a Real Patriot Act?
We presently enjoy the transparent technology and enough annual financial transactions to retire all other taxes and debts with a temporary 1% (.01) Constitutional uniform tax. I say temporary, because once the debts are paid down and the budget balanced with exponential productivity increases, the 1% TT can be reduced in stages to one mil (.001) and then one basis point (.0001).
Productivity increases from a 1%, 1 mil and 1 basis point transaction tax will liberate capital and prosperity as never before. Or we can keep trying the old tired tax rostrums that got US where we are now, in deep debt and danger of default.
Although Congress and the Supreme Court in the past had problems with across the board spending freezes, perhaps Congress, Courts and the Executive Branch can find a way to regain public trust by implementing the 1%TT with a Holiday on All other Taxes and Emergency Spending Freeze until debt as a percentage of the economy GDP begins to decline.
December 23rd, 2009 at 9:50 pm
A 1% transaction tax means you’ll instantly lose 2% on every investment in the markets you make. 1% in & 1% out. Who would invest in the stock market with that fee? Between that & capital gains, the average return on a stock would be 0%. Again, who would invest in the stock market which gives the monetary fuel for companies to hire & pay their workers & expand their plants? LOL You’re nuts. Nice way to cause a 2nd crash of the markets.
January 4th, 2010 at 1:24 am
You may be naive Jack, myopically repeating Wall Street doublespeak.
They cite free market liquidity while rigging the game and depending on government for handouts and bailouts when they lose. Yet Warren Buffett and Jack Bogle of Vanguard back the transaction tax among others who know markets.
To paraphrase Keynes, the purpose of the transaction tax is to return constructive enterprise to the casino while preserving liquidity and solvency. Many people the last 10 years in the real and stock markets wish all they had lost was 2% on the investments they made, instead of half their life savings. There is always a cost of doing business Jack. For example, investment bankers took 10% fees on many deals for over a century and no one complained. Hedge fund managers took more. For too long Wall Street scalped clients for free rides and bonuses. Once respected institutions gambled away the rent money, expecting to be made whole by Taxpayers and the Fed and keep their bonuses. No more moral hazard! Markets may in fact crash from decades of deficits compounding to the trigger point of widespread defaults and implosion beyond what government can rescue. Treasury and other markets will certainly crash if Washington and Wall Street do not reign in borrowing and spending, and figure out a productive way to handle $604 Trillion in derivatives, $106 Trillion in unfunded agency mandates and debts exceeding the GDP. Interest on non-productive government debt is the fourth largest 2010 budget item, usury compounding to terminal velocity. Maybe if you reread the post again you will understand the 1% Temporary Transaction Tax replaces all other unproductive taxes including capital gains. Much market activity became no longer productive, but speculative, rearranging deck chairs on the Titanic. Dark Pool High Freq Proprietary Trading does not raise capital for productive plants and workers, but increases debts from unproductive government, particularly when taxpayers are robbed to support gambling. In fact, last year, long-term investors bought $66 in bond funds for every dollar in equity funds. And their commissions and fund fees in many cases were more than 1%…Regards*Rich