Capital Times Excerpt: (John Nichols)
Last week, Kagen joined Rep. Peter DeFazio, D-Ore., and Sen. Tom Harkin, D-Iowa, in proposing legislation to assess a financial transactions tax... The legislation, known as the “Let Wall Street Pay for the Restoration of Main Street Act,” would tax each stock transaction at 0.25 percent and futures, swaps and credit default swaps at 0.02 percent. The tax, which would not apply to the first $100,000 of a trader’s annual transactions, is designed to target the speculators. Pension funds and retirement investors are protected, via a guaranteed refund of the tax.
Center For American Progress Excerpt: (Michael Ettinger)You know Wall Street is going to fight this tooth and nail. We can expect a Wall Street Journal editorial soon from their congressional liaison Paul Ryan explaining how 401k's, borrowing rates and seniors will suffer because the tax will be passed down...or, it's unconstitutional...somehow.
This idea has not been well received by the industry. Opponents on Wall Street make two basic arguments: First, they argue, financial transactions of the sort that would be subject to the tax could easily be moved anywhere in the world so if you tax them, they will go. Second, they argue that some transactions that are helpful to the economy wouldn’t be profitable even at these extremely low rates. This argument posits that traders who buy and sell constantly while making tiny profits on their many transactions would be driven from the market because the tax would eat mightily into those tiny profits.
Why is it the financial managers swinging the deals and working the swaps collect millions in bonuses but there's never enough left over for a quarter-point tax?
A Quote To Chew On
Dick Cheney On The Economy Excerpt:
When Treasury Secretary Paul O'Neill raised objections to a new round of tax cuts while warning Vice President Dick Cheney about growing budget deficits in November 2002, Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said. A month later, Cheney told the Treasury secretary he was fired.
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