In February 2013, United States senators Tom Harkin (D-Iowa) and Peter DeFazio (D-Oregon) introduced a bill to implement a new tax of three basis points (that is, three pennies for every hundred dollars) on most nonconsumer stock trades. If made law, the tax could generate $350 billion in federal revenues over the next ten years.
Describing the proposed tax as a “simple matter of fairness and fiscal sanity,” Senator Harkin elaborated, “We need the new revenue generated by this tax in order to reduce deficits (after sequestration) and maintain critical investments in education, infrastructure, and job creation. . . . Wall Street (investors) can easily bear this modest tax.”
Because the tax is percentage-based, large transactions would be harder hit; most middle-class investors would see minimally increased charges. The tax would also help curb overzealous market speculation by discouraging the large-sum, short-term, risky trading that tends to put the economy in a fragile state.
This bill has been proposed in previous congressional sessions, yet it has been underreported in the corporate media, making it hard to gain public support.
France recently became the first country in Europe to pass such a tax. French finance minister Pierre Moscovici said the law marks “the first step toward fiscal reform and a move toward justice.” Ten other European countries are discussing similar laws. For the US, the Harkin–DeFazio transaction tax would be a major step in civilizing speculative investment, stabilizing the economy, and reducing the national debt.
Transaction Tax Helps Civilize Wall Street and Lower the National Debt
George Zornick, “Financial Transactions Tax Introduced Again—Can It Pass This Time?,” Nation, February 28, 2013, http://www.thenation.com/blog/173134/financial-transactions-tax-introduced-again-can-it-pass-time.
“Lawmakers Introduce Targeted Wall Street Trading Tax,” Albany Tribune, February 28, 2013, http://www.albanytribune.com/28022013-lawmakers-introduce-targeted-wall-street-trading-tax.
Gregory Heires, “As the Misguided $1.4 Trillion Cuts Begin, a Wall Street Tax Looks Like a No-Brainer,” Reader Supported News, March 7, 2013, http://readersupportednews.org/pm-section/78-78/16370-as-the-misguided-14-trillion-cuts-begin-a-wall-street-tax-looks-like-a-no-brainer.
Helene Fouquet and Adria Cimino, “French Lawmakers Pass Trading Transaction Tax,” Bloomberg Businessweek, August 1, 2012, http://www.businessweek.com/news/2012-07-31/french-lawmakers-pass-budget-bill-including-transaction-tax.
Student Researcher: Marisa Soski (San Francisco State University)
Faculty Evaluator: Kenn Burrows (San Francisco State University)