2016 Postmortem
Related: About this forumWall Street Should Pay a Sales Tax, Too
http://www.commondreams.org/views/2016/04/06/wall-street-should-pay-sales-tax-tooWhen a high-rolling trader buys millions of dollars' worth of stocks or derivatives, there's no levy at all.
In case there was any doubt, the presidential election fight has confirmed that blasting Wall Street, even eight years after the financial crisis, is still a vote-getter.
Hillary Clinton has said shed like to jail more bankers. Donald Trump has skewered the hedge fund managers who are getting away with murder. And Bernie Sanders has made Wall Street accountability a centerpiece of his campaign.
Of course, financial industry lobbyists arent about to take this lying down. (FB- Please note that Barney Frank is know on the Board of one of the large WS Banks making him a lobbyist and corporate stooge) In recent weeks, theyve turned up the heat on lawmakers to block one particular measure that Sanders has mentioned in nearly every stump speech: taxing Wall Street speculation.
Americans are used to paying sales taxes on basic goods and services, like a spring jacket, a gallon of gas, or a restaurant meal. But when a Wall Street trader buys millions of dollars worth of stocks or derivatives, theres no tax at all.
Sanders has introduced a bill called the Inclusive Prosperity Act, which would correct that imbalance by placing a small tax of just a fraction of a percent on all financial trades. It wouldnt apply to ordinary consumer transactions such as ATM withdrawals or wire transfers.
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Bernie out front and leading yet again. Hillary, No We Can't
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Jackie Wilson Said
(4,176 posts)Qutzupalotl
(14,230 posts)Sanders proposed a per-transaction tax to slow down high frequency trades. He has earmarked the proceeds to fund public college tuition. I don't know the details of Clinton's plan, but she has expressed support for the idea.
Jackie Wilson Said
(4,176 posts)whatthehey
(3,660 posts)Items are charged sales tax when sold to the final consumer, not at upstream distribution in the supply chain (you pay tax buying a soda. 7-11 didn't pay taxes buying it from XYZ bottling who didn't pay taxes buying it from SuperSoda Corp.) Stocks are not consumed and are bought with an implied intent to resell. It's worth keeping dividend paying stocks for a long time for sure, but in essence they are then serving as a savings account. Eventually you will need to withdraw or bequeath your principal, selling the stocks.
There's also a double taxation issue. I pay sales tax if I buy a product. If it becomes a collector's item and I sell it for more money, I don't also pay taxes on that profit. If we apply sales taxes per se to stocks, then there are taxes on both ends, which is what wholesale tax-free trade avoids in the first example.
Now taxing trading is a decent enough idea, but I don't think sales taxes are a workable way to do it. A small fixed transaction tax or the like would be less problematic.