A Modest Proposal: A Small Sales Tax for Wall St.

Congressman Chris Van Hollen

One of the few taxes that Republicans espouse is the sales tax. which creates a disproportionate burden on the lower middle class and the poor. GOP governors, like John Kasich in Ohio, continually try to lower the fair, graduated income tax while they raise or extend the sales tax to cover more services. That being the case,  one would logically conclude that Republicans would favor a sales tax on financial transactions. Not happening.

So surely the Democrats would be fighting tooth and nail to pass such legislation. Again, not happening.

Since a small Financial Transaction Tax (FTT) is such a simple, common sense approach to raise much-needed revenue and solve other problems, it is difficult to understand why there is not a groundswell of support. Perhaps the key is the word "financial." Few politicians, especially after Citizens United, want to incur the wrath of Wall Street and the Big Banks.

A tax on financial transactions is often referred to as a "Robin Hood Tax," in that the wealthy will be paying a larger proportion than the middle and lower classes.

Maryland congressman, Chris Van Hollen, proposed a program for a FTT similar to the one the European Union is installing next year. "It would tax stock trades at a rate of 0.1 percent (10 cents on $100) and trades of derivative at a rate of 0.01 percent (1 cent on $100). Extrapolating from a recent study of the revenue such a tax would raise in Europe, Van Hollen's tax would raise more than $130 billion a year or more than $1.5 trillion over the course of a decade."*

Vermont senator and democratic presidential candidate, Bernie Sanders, introduced a bill in the Senate to offer a free public college education to all qualified Americans. As in Europe, this education plan would be paid for with a financial transaction tax.

Of course, those day-traders who make many trades a day will have an expense from which they have been exempt. But that may be a good thing. Those people may consider getting a real, constructive job. Or they will continue on as before and pay the toll.

But the bottom line is this: if a 50-week-a-year laborer has to pay sales tax when he purchases a pair of jeans for his son, why doesn't an investor have to pay a much lower tax when she or he buys a stock, not out of need, but out of greed.

And if you are going to tell me such a measure will shut down Wall Street, excuse me while I roll on the floor laughing.

*Deane Baker Nation of Change, May 11, 2015




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