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tax wall street

February 12, 2009

I submitted a copy of my last post, “tax the speculators,” to the editorial board at the Oregonian, and an edited version is going to be published in Wednesday’s edition. Even though it has been edited quite a bit, I am happy that more people will be exposed to the idea.

Here is the original:

I am certainly no expert when it comes to our tax system, but I agree with Ralph Nader 100% that we should tax the speculators on Wall Street. Considering that we as a nation are faced with a gigantic deficit, a deepening recession and tax cuts that will further limit revenue on both the state and federal level, I think that Congress should seriously consider instituting what University of Massachusetts economist, Robert Pollin, describes as a “small tax on all financial-market transactions, comparable to a sales tax.”

Not only have Wall Street speculators done their fair share to get us in this mess, but a transaction tax would go a long way toward helping Wall Street pay for its own bailout. It seems more than fair to institute a tax of 0.25% on a stock trade or 0.02% on the purchase of credit default swap when most people in the United States have to pay anywhere from 5% to 8% sales tax on whatever they buy.

I am surprised that there has not been more discussion on this issue seeing as how this modest tax proposal would not only generate more revenue and discourage rampant speculation, but according to economist Dean Baker, a modest financial transactions tax would “easily raise an amount equal to 1% of GDP” and potentially “finance a 10% across-the-board reduction in the income tax.”

That is why I am urging everyone to lobby their member of Congress to support this proposed tax policy. I know that the subject of new taxes is not a popular topic of conversation these days, but in drastic economic times such as this, something has to be done to help raise more revenue, curb speculation and, more important, stabilize the market. And I am convinced that this is a step in the right direction. It is time that someone besides the American tax-payer is asked to help shoulder this burden.

And here is the edited version:

Considering that the nation is faced with a gigantic deficit, a deepening recession and tax cuts that will further limit revenue on both the state and federal level, Congress should seriously consider instituting what University of Massachusetts economist, Robert Pollin, describes as a “small tax on all financial-market transactions, comparable to a sales tax.”

Not only have Wall Street speculators done their fair share to get us in this mess, but a transaction tax would go a long way toward helping Wall Street pay for its own bailout. A tax of 0.25 percent on a stock trade or 0.02 percent on the purchase of credit default swap is fair when most people in the United States have to pay a sales tax of 5 percent to 8 percent.

This would not only generate more revenue and discourage rampant speculation, but according to economist Dean Baker, a modest financial transactions tax would “easily raise an amount equal to 1 percent of GDP” and potentially “finance a 10 percent across-the-board reduction in the income tax.”

It is time that someone besides the American taxpayer is asked to help shoulder this burden.

This is the first submissions of mine to be printed, and to be honest, it feels kind of good to have something I wrote in my local paper. I think that whenever we feel we have a good idea, or just something to say, we should try to put our thoughts out there for people to see.

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