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Huey P. Long

(1,932 posts)
Mon Jun 25, 2012, 08:28 AM Jun 2012

The Tiny Tax that Terrifies Wall Street

The Tiny Tax that Terrifies Wall Street
Sunday, June 24, 2012
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The goal of this new “Robin Hood” campaign: a tiny tax on the ever-churning financial transactions that have made the Jamie Dimons of our time fabulously wealthy. The most lavishly paid bank CEO in America, Jamie Dimon of JPMorgan Chase, sashayed back to Capitol Hill last Tuesday for still another congressional hearing on JPMorgan’s billions in speculative trading losses this past spring.

Dimon didn’t have much trouble fending off the few tough questions that came his way from lawmakers on the House Financial Services Committee. But Dimon and his fellow Wall Streeters may have much more trouble handling a new campaign — for taxing financial speculation — that launched the same day Dimon testified.

The goal of this new “Robin Hood” campaign: a tiny tax on the ever-churning financial transactions that have made the Jamie Dimons of our time fabulously wealthy. This Robin Hood campaign for a financial transaction tax actually began two years ago in the UK and quickly spread to over a dozen other nations. The U.S. branch of the campaign launched last week comes with some high-profile champions.

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The volume of global speculative trading, these financial industry experts pointed out, now exceeds — by 70 times — the size of the entire real global economy, the actual goods and services that people use everyday.

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http://www.nationofchange.org/tiny-tax-terrifies-wall-street-1340547703

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'The Banker' courtesy of poster FailureToCommunicate:


Uploaded by RobinHoodTax on Feb 9, 2010
Campaign video by Richard Curtis and Bill Nighy, about the Robin Hood Tax, a tiny tax on bank transactions that could raise hundreds of billions for public services and to tackle poverty and climate change at home and around the world. Add your own voice to the campaign at http://www.robinhoodtax.org.uk
13 replies = new reply since forum marked as read
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RC

(25,592 posts)
1. It only makes sense.
Mon Jun 25, 2012, 08:36 AM
Jun 2012

But then again, why not outlaw speculative trading in the first place? It is pure gambling with other people money. Heads they win and keep the winnings, tails you lose and reimburse them for their losses.

 

Huey P. Long

(1,932 posts)
2. 'outlaw speculative trading'? Impossible. Make it not as lucrative or worthwhile by a .003 tax
Reply to RC (Reply #1)
Mon Jun 25, 2012, 08:43 AM
Jun 2012

on HFT to provide service funding? Genius.

hunter

(38,240 posts)
3. It ain't gonna happen, but I'd put, say, a penny per share tax...
Mon Jun 25, 2012, 09:44 AM
Jun 2012

...on the trading of any share that's not kept for at least a year.

It would encourage corporations and traders to take the long view, and clear out all the smoke.

The problem is, most of the market is smoke and mirrors.

This market was looted and burned down by arsonists a long time ago.

 

Huey P. Long

(1,932 posts)
7. I do not think you understand what this is at all.
Mon Jun 25, 2012, 10:28 AM
Jun 2012

This has nothing to do with regular trading.

HFT (high frequency trading) is a new monster. Computer programs that execute 1000's of trades per second.
Its a scam the big boy extractors use to harvest money. The regular investor is getting screwed as well as the public.

hunter

(38,240 posts)
13. Oh, I understand. I'd call any trading within a year "high frequency..."
Mon Jun 25, 2012, 03:50 PM
Jun 2012

... and tax that.

I'd make the market a very leisurely business. Real people, both large and small investors, would have time to sit down and ponder the actual value of the paper they were trading. Restless people, automated trading schemes, and short-term thinkers would be forced out of the game.

snot

(10,475 posts)
4. We need Glass-Steagall and higher ordinary income taxes, period.
Mon Jun 25, 2012, 10:06 AM
Jun 2012

Without those, these other measure just make everything more complicated.

Costs and risks need to be allocated in a rational way. I.e., this tax might make sense if it were essentially a premium with the proceeds used to fund an insurance pool to make sure that parties like AIG could make good on the bets they're selling. But who wants to administer that kind of hot mess? WE don't.

The parties should want it for themselves, if they weren't expecting taxpayers to bail them out.

And the thing that puts pressure on gov'ts to use taxpayer funds to bail them out is the absence of a Glass-Steagall -type wall between traditional banking and speculative investment, bec. it's the absence of Glass-Steagall that means that grandma's savings on deposit can be grabbed by Goldman Sachs to pay off its speculative bets. If it weren't for that, we could let AIG and Goldman both fail, and we'd all be better off.

You can say well we're never gonna get Glass-Steagall back; but meanwhile we're letting Uncle Jack "invest" grandma's savings at the racetrack. Actually it's much worse than that; it's more like, Uncle Jack is betting grandma's savings on a horse he knows can't win, while he bets his own money against the same horse.

If you make Uncle Jack pay a tiny tax on his bets, sure, he'll squawk, but it'll do nothing to slow the economic meltdowns.

BumRushDaShow

(126,616 posts)
6. If they repeal Graham-Bliley-Leach
Mon Jun 25, 2012, 10:20 AM
Jun 2012

that should theoretically bring Glass-Steagall back. We really really need to wipe Phil Graham out of our collective consciousness.

JHB

(37,122 posts)
5. I'll say what I said the last time this came up...
Mon Jun 25, 2012, 10:12 AM
Jun 2012

I don't care for the name, it fits into the anti-tax mob's "robbery/taking" framing and implies that we don't actually have every right to do that.

I think "Sales Tax for Wall Street" or something along those lines.

Or "Encouraging Real Investment Act" maybe.
Tycoon Toll
Arbitrage Assessment
Healthy Economy Insurance Contribution
Wheeler-Dealer Dues


One of the things that a tax on transactions would do is cut down on trading made just for the sake of getting a few cents per share on small ups and downs. There's nothing productive about those sorts of trades, it's just gaming the rules. So change the rules to discourage that, and encourage investors to "park their money" someplace and take a longer view than the next quarterly report.

There are plenty of people who won't be swayed by the fairness issues but can be persuaded if there is a solid "capitalist" reason for supporting it.

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