Wall Street’s Nightmare: Here’s How to Really Expedite the Recovery
By George Goehl
Rebuilding happens through investment, not cuts or austerity. We pay a sales tax on clothes. Why not on trades?
Apparently, the United States government has been eavesdropping on 35 world leaders. Too bad we didn’t learn what most of those nations — and the rest of the developed world — already figured out: that we can end the revenue crisis in America by taxing Wall Street.
We simply do not have the federal resources needed to spur the kinds of investments it will take to rebuild communities and put people back to work. So we need more money. And there’s money to be found. Not in grandma’s pension or grandpa’s Medicare, not in our children’s classrooms, and not in programs that protect the poorest among us. The money is on Wall Street.
Legislation introduced in Congress would institute a 0.5 percent tax on stocks, a 0.1 percent tax on bonds and a 0.005 percent levy on derivatives and currency. That’s literally fractions of costs to Wall Street, but these small taxes would raise approximately $350 billion annually. And 40 nations — including Singapore, Hong Kong and the U.K. — already have such a tax. Instituting this basic tax in the United States wouldn’t hurt Wall Street but would simply bring our policies into line with the rest of the global economy.
America has been through economic crises and recessions before, but what we’ve never done is recover through cuts and austerity. Rebuilding our economy means literally rebuilding, investing public money to strengthen our infrastructure, invest in our education system and create jobs that help get our nation back on its feet. It’s time for the next generation of big, bold investments to launch the next great wave of American innovation and prosperity — the kinds of investments that brought us Social Security, a railroad system, cures to disease, and provided jobs and security to generations of Americans and will get us on our feet yet again.
The question, then, is: Who should pay? Are seniors, students, the poor and working class expected to continue to make all the sacrifices? Or will those who benefit the most from the laws — and in many cases lack of laws — of our nation pay their fair share and fully contribute to the rebuilding of this country.
Modest taxes on Wall Street transfers is a chance for America to make game-changing investments in our people and our infrastructure. It is also a means of making sure bankers on Wall Street pay their fair share.
This isn’t another “Grand Bargain” where everybody loses — it’s a Grand Vision for a better tomorrow, built by American investment and ingenuity, and funded by the part of our economy that is already humming along.
The fact is that I pay a sales tax when I buy clothes for my daughter, but there is no tax on Wall Street trades. All a transaction tax would do is close this loophole exception for Wall Street, which would generate $350 billion that we can invest in projects and programs that help all Americans.
According to a 2013 poll by Hart Research Associates, 62 percent of Americans support a small tax on stock, bond and market trades. The same poll found that nearly two-thirds of Americans want corporations to pay more in taxes.
And yet in Washington, conservatives continue to push for massive cuts, and refuse to have new revenues on the table in any budget negotiations. Meanwhile a number of Democrats show signs of buying into an austerity agenda, negotiating with themselves before the negotiations have actually begun. Not only is this bad policy, it’s bad politics. The American people support raising revenues — politicians, especially Democrats, just have to put their finger in the wind on this one and do the right thing.
We need public investment to jump-start our still-too-sluggish economy. That money should come not from slashing investments on our grandparents and our children but from a tiny little pinprick of a tax on Wall Street — a tiny tax that will raise a ton of revenue. And then we can get America working again and back in line with the world economy — and not a moment too soon.