Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
In reply to the discussion: STOCK MARKET WATCH -- Wednesday, 5 December 2012 [View all]Demeter
(85,373 posts)20. Eliot Spitzer: Tax the Traders! It Would Solve Economic Crisis and Stop Reckless Activity
http://www.alternet.org/economy/eliot-spitzer-tax-traders-it-would-solve-economic-crisis-and-stop-reckless-activity?akid=9757.227380.HqWVJL&rd=1&src=newsletter755209&t=12
...it has been around for a long time, supported by a wide range of economists, including Nobel laureate James Tobin, as well as advocates, including Ralph Nader in the Washington Post this weekend, and elected officials: a tax on financial transactions. It will give us gobs of revenue. It will fall on a sector that has generated enormous and unwarranted profits for a very few, who at the same time have benefited from huge bailouts and regulatory help and largely escaped any responsibility for their central role in creating the financial cataclysm that we are still struggling with.
Here is the idea: A tax of less than half a percent on every $100 of stock sales or sales of other financial instruments including bonds, derivatives, and options. The tax could raise anywhere from $170 billion to $350 billion per year depending how it was applied. Extend that over 10 years, and we are raising almost what the White House and Republicans agree needs to be raised in order to accomplish the objectives of a grand bargain.
But there is an added benefit here: Trading in the equity and debt markets has gone wild over the past few years. High-speed trading and speculation have overtaken the economically legitimate reasons for our desire to have highly liquid markets: the capacity to raise capital and then allocate it efficiently among sectors and companies. The trading that has emerged over the past few years is not serving that purposeit is a casino enterprise driven by hidden pools and computer algorithms that do not seek to hold capital for longer than an instant.
To the extent that a financial-transfer tax drove some of those trading practices out of the marketplace, that would be another good outcome....
...it has been around for a long time, supported by a wide range of economists, including Nobel laureate James Tobin, as well as advocates, including Ralph Nader in the Washington Post this weekend, and elected officials: a tax on financial transactions. It will give us gobs of revenue. It will fall on a sector that has generated enormous and unwarranted profits for a very few, who at the same time have benefited from huge bailouts and regulatory help and largely escaped any responsibility for their central role in creating the financial cataclysm that we are still struggling with.
Here is the idea: A tax of less than half a percent on every $100 of stock sales or sales of other financial instruments including bonds, derivatives, and options. The tax could raise anywhere from $170 billion to $350 billion per year depending how it was applied. Extend that over 10 years, and we are raising almost what the White House and Republicans agree needs to be raised in order to accomplish the objectives of a grand bargain.
But there is an added benefit here: Trading in the equity and debt markets has gone wild over the past few years. High-speed trading and speculation have overtaken the economically legitimate reasons for our desire to have highly liquid markets: the capacity to raise capital and then allocate it efficiently among sectors and companies. The trading that has emerged over the past few years is not serving that purposeit is a casino enterprise driven by hidden pools and computer algorithms that do not seek to hold capital for longer than an instant.
To the extent that a financial-transfer tax drove some of those trading practices out of the marketplace, that would be another good outcome....
Edit history
Please sign in to view edit histories.
48 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
RecommendedHighlight replies with 5 or more recommendations
The Rich Create Bubbles, Not Jobs By Hugh, who is a long-time commenter at Naked Capitalism
Demeter
Dec 2012
#3
Eliot Spitzer: Tax the Traders! It Would Solve Economic Crisis and Stop Reckless Activity
Demeter
Dec 2012
#20
8 Things Democrats Must Do in Washington Showdown Over "Fiscal Cliff" ROBERT REICH
Demeter
Dec 2012
#22