1. RAS
    February 1, 2010 @ 11:41 pm

    In principle, I like the idea of a transaction tax on financial transactions. However, I think I know the ways of Washington a bit too well to believe that any tax legislation passed will in practice do anything besides increase taxes for average consumers. I am doubtful that a transaction tax will fundamentally change the behavior of Wall Street, or affect change on the kind of speculation that leads to boom and bust economies.

    All you have to do is look at the British model of this tax to see what the financial industry will do to this legislation. In the UK, the financial services sector is essentially exempt from this tax. The people who end up paying the bulk of this tax are the average stockholder.

    I would be in favor of a tax like this if I felt that it would be used as a tool to change market behavior, but I know it is nothing more than a money grab. No transactional tax will affect speculation in financial markets

    If you want to change the speculative nature of the stock market, for example, you need to punish people for investing in short terms such as 5 years or less. A 0.05% transaction tax will not discourage someone from investing $25 in a stock if a year from now they think it will be worth $100, because they will have still made $74.99.

    I think a good progressive tax would be to incentivise people to hold onto their stocks for the long term by charging them extraordinarily high capital gains taxes unless the sale of that stock took place years down the road. For example, charge a 95% tax on capital gains for purchases of a period of less than one year, 90% tax on two years, and so on out until about a 10 year window or so where it drops off significantly. This sort of tax would significantly reduce the volume of the markets because it would be exceedingly difficult to make short term profits.

    I would hope a progressive capital gains tax would fundamentally change the way people think about equity investing. I think people would see it for what it is: a calculated gamble in a corporation. Yes, it would be harder to raise capital, but I don’t think that’s such a bad thing. In fact, the government could provide support for certain beneficial industries (ex. sustainable agriculture) by offering a significant tax incentive for raising capital in the industry.

    The benefit of equity investing has been forgotten. (or maybe it never really existed in the first place). Its purpose is to provide capital for activities that would be too expensive to undertake without a group of people’s support. The activity itself should improve the quality of life of those people. It should not just be about making a return on an investment. I know plenty of investors who could care less about what they are investing in, so long as they’re making a profit, and that’s wrong.


  2. Robert F.
    February 6, 2010 @ 10:06 pm

    Friday, January 29, 2010 | Posted by Jim Hightower ( On his webpage ).

    Listen to this Commentary
    Are you feeling sorry for Wall Street bankers yet?

    Poor babies, everyone is down on them. First, We the People are steamed that these bailed-out barons of finance are again putting billions of dollars of bonus pay into their pockets; second, a special national commission is publicly grilling top bankers about the damage their greed has done to our real economy; and, third, President Obama is proposing to slap a greed tax on the biggest of the giants.

    Wow. Three strikes and you’re out, right? In baseball, yes; in bankerball, never.

    Such human traits as modesty, shame, and personal responsibility are not in the genetic make-up of Wall Streeters, so they have an answer for everything that’s being thrown at them.

    Start with those bonuses. Yes, say the bankers, we’re stuffing ourselves with money that we should be loaning out to help Main Street recover from the crash we caused, but – hey – we’ve also started a few charities to help, you know, the little people. So buzz off, killjoy.

    As for that commission digging into who caused Wall Street’s financial meltdown, the bankers’ answer is unanimous: no one. The jefe of JPMorgan Chase, for example, explained to the commission that a financial hickie “happens every five to seven years. We shouldn’t be surprised.” Uh, sir, this is the worst crash since the Depression – and, yes, we are surprised. And angry.

    Then there’s Obama’s tax. Unfair, screech the Wall Street flock, apparently clueless that their own greed caused the crash, which led to the bailout, which let them grab bonus cash for themselves. That’s the very definition of unfair.

    Not only should these sorry greedheads have their banks taxed to recover all of our bailout money, but we should also tax all of the bonus pay they’re ripping off.

    “Bankers Without A Clue,” The New York Times,” January 15, 2010.

    “Wall St. Weighs a Constitutional Challenge to a Proposed Tax,” The New York Times, January 18, 2010.

    –Posted by Jim Hightower ( On his webpage/Friday, January 29, 2010 ).


  3. Speculation on the deficit commission’s lack of a Wall Street speculation tax « CitizenVox
    December 24, 2010 @ 1:58 am

    […] Bowles and Alan Simpson, were both disappointing and highly suspect when they blatantly omitted a speculation tax on Wall Street and the financial […]


  4. Terry McCall
    March 2, 2014 @ 5:41 pm

    We are all for going after the elite banksters. It’s a place were left and right unite. However, do be cognoscente of the unintended consequences. The little guy might get squished by a blanket policy. Have some sort of relief; whether it be a tax credit or out right exemption for the small investor/trader or the big guys will just pass the pain along to us, again.


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