Monday, August 12, 2013

5 Reasons It's Just Absurd That America Doesn't Tax Wall St's Transactions

The financial speculation industry has devastated middle-class wealth -- and there's a simple way to curb its power
Paul Bucheit
The logic for the tax is indisputable.

-- 1. Financial industry speculation devastated middle-class homeowner wealth.
-- 2. U.S. investors pay zero tax on their speculative transactions.
-- 3. The tax is easy to implement, and is very successful in other countries.

The emotional appeal reaches most of America:

-- Why should the rest of us pay up to 10% on the necessities of life while risky derivative purchases aren't taxed at all?
-- Why should kids  around the country lose their arts programs while trillions of dollars flow, untaxed, to Wall Street?

On July 8th, 2013,  Chicago Political Economy Group (CPEG) member Bill Barclay and  Illinois Green Party Chair Rich Whitney presented arguments for the Financial Transaction Tax (FTT) in front of the Illinois Pension Reform Committee. The video is available here (01:29:40), and the slideshow  here. Much of the following derives from their work.

The Tax Works in Countries with the 'Freest' Economies

A good place to start is Singapore. Or Hong Kong or Switzerland. These are three of the top five countries on the Heritage Foundation's  Index of Economic Freedom, and they all have FTTs. Critics who might argue that non-FTT taxes are lower in Singapore and Hong Kong should look at  World Bank and CIA World Factbook datasets, both of which show the U.S. with lower tax revenues as a percentage of GDP. The U.S. is clearly undertaxed across a wide range of taxes.

Read More