Transaction Tax: The Right Thing to Do

Time for Transaction Tax

When Mary Mainstreet  buys a dress, a wash machine, or a used car, she pays some sort of sales tax. In many states, when Mr. and Mrs. Retired hire someone to mow their lawn, prune their trees, or plow the snow from their driveway, they pay sales tax. Mary and the Retireds have very little control over how the money they pay in sales tax is spent. It may be used to replace the money used to keep the Bob Evans Corporation in Ohio, but that's not their call. What they do know is that a major corporation is receiving a sweatheart deal to move their corporate headquarters from one part of Ohio to another. Mary Mainstreet and the Retireds would be willing to move from one place in Ohio to another if they could get a deal similar to Bob Evans.


Knowing that they will never get a sweatheart deal like the major corporations, Mary Mainstreet and Mr. and Mrs. Retired continue to pay sales tax because they have no choice, but more importantly they know that their taxes are serving a wide-range of activities that only government can serve.. And, even though they realize that a sales tax by its very nature is a greater burden on the poor than the wealthy, they continue to pay it in order to support the government in doing the things that nobody else can or will do.


And then there is Wall Street. Millions of stock are sold daily and no one is paying sales tax or a Value Added Tax to the government which facilitates the very existence of Wall Street. Perhaps it's time for these oligarchs, day-traders, fund managers and  "Mom-and-Pop investors" to pony up and pay a pittance for every transaction made.


Senator Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-Oregon), last month, introduced legislation that would impose a miniscule 0.03 percent fee on finanacial transactions. This fee is so small that the only ones who would feel it are the speculators who move vast sums of money in and out of the market. These are the very speculators who have caused so many problems for the economy and the markets in the past. "But because of the enormous volume of transaction, the new tax would still raise $350 billion in the next ten years, according to nonpartisan congressional scorekeepers." (Huffington Post. 12/16/2011)


I gotta tell you. my friend, Hank, and I think $350 billion is not chump change.


Also,  gotta tell you:  if our friend, Mary Mainstreet has to pay a 7% sales tax on her daughter's new, back-to-school dress, Mitt Romney and his buddies can afford to pay a  measly  0.03 percent transaction fee when they buy and sell millions-of-dollars of stocks.


Personally, Hank and I think they should pay as much as Mary has to pay for her daughter's new dress, but we all know that will never happen. We know the game is rigged; the 99% will always have to prop up the 1%.