Here are some questions to consider: What do the Wall Street firms do that is so vital for the national interest? How does speculation contribute to our society? It’s time for Wall Street to step up and provide some answers.

The reckless actions of Wall Street institutions led to the collapse of the the U.S. economy and the deep recession of 2008-09. The Wall Street firms looted and gambled trillions in worker pensions and mutual fund savings. The Wall Street traders made billions of dollars in speculative money — bets on bets — holding hostage the real economy where money is made by providing goods and services. And the actions of Wall Street resulted in the loss of more than 8 million jobs.

Despite all the lasting harm caused by the casino capitalists, the big banks are now bigger, richer and more powerful than they were when they were bailed out in late 2008. The only ones who were punished were the U.S. taxpayers, who footed the $600 billion bill for the excesses of Wall Street. Brazenly, many firms still continue to gamble with other people’s money.

Something needs to change. One necessary change lies in a financial transaction tax — often referred to as the “Robin Hood Tax.” The Robin Hood Tax movement began in the United Kingdom in 2010 with the support of hundreds of economists, prominent public figures and social justice organizations.

Yesterday, Rep. Keith Ellison (D-Minn.) reintroduced “The Inclusive Prosperity Act” — inspired by the Robin Hood Tax. If passed, the bill (H.R. 1579) would create a minuscule tax on the purchase and sale of derivatives, options and stocks. The tax would be small, half a percent or less of the transaction value, depending on the product. This amounts to half a penny or less per dollar.

Consider this fact: American consumers in most states pay sales taxes on the necessities they purchase — cars, appliances, clothes, etc. The rate of such sales tax is, in some areas, as high as 7 percent. For example, a schoolteacher or police officer who buys a $100 pair of shoes pays up to $7 in sales taxes. Most people accept the idea of paying such a tax. But what about the folks on Wall Street? A trader can buy and sell millions of dollars of financial products each day without paying a cent in sales taxes. Why should financial transactions be exempt from a small sales tax?
A financial transaction tax could raise $350 billion annually — money that could be used to repair critical infrastructure, create decent paying jobs, reduce the tax burden on individuals and start to rein in frivolous high-volume trading.

At the news conference announcing the legislation, Rep. Ellison said: “This is a small tax on financial transactions that will allow us to meet the needs of our nation. And didn’t America step up, on very short notice, for Wall Street when it needed help? Well, now the American people need help.”

Critics of a financial transaction tax have all sorts of excuses. They argue it would harm ordinary investors; it wouldn’t, there are protections in place for small investors. Some say it would drive trading to offshore tax havens; but forty countries already have such a tax in place with little compelling evidence showing an adverse effect.

It’s obvious that the casino capitalists won’t give an ounce of their moral obligation without a fight. However, the endorsement of more than a thousand economists speaks volumes. One supporter, the Capital Institute’s John Fullerton (a former managing director at JPMorgan), has stated that a financial transaction tax could have significant impact in lessening the use of high-frequency trading. He has estimated that nearly 70 percent of equity-trading volume falls under this category of highly speculative trading. In June 2012, Fullerton and over 50 other financial industry professionals wrote a letter to the G20 and European leaders advocating for small financial transaction taxes.

The United States had a financial transaction tax from 1914 until 1966. It imposed a tax of 2 cents on every $100 sale or transfer of stock.

The question I posed at the outset was: What does Wall Street do that is so vital for the national interest? To begin to answer it, they can start paying this small tax. As the Robin Hood tax website succinctly puts it with their slogan, it would be “small change for the banks and big change for the people.” The $350 billion raised annually with a financial transaction tax would go a long way in helping American workers and bolstering the economy.

If you agree, stop practicing futility. Show a civic pulse. Write and call your Congressional Representative. Tell them you support “The Inclusive Prosperity Act” and they should support it as well. National Nurses United, the largest union and professional association of registered nurses in the United States, has already done this and much more with their national Robin Hood Tax campaign. Visit robinhoodtax.org to learn more.

 

The Ralph Nader Reader
by Ralph Nader

It’s the Media, Stupid
by John Nichols, Barbara Ehrenreich, Ralph Nader, Paul Wellstone, Robert W. McChesney, Barbara Ehrenreich, Ralph Nader, Paul Wellstone

Follow Ralph Nader on Twitter: www.twitter.com/Ralph_Nader

“This is a huge day,” Rep. Keith Ellison announced Wednesday at a press conference within view of the Capitol, referring to legislation he  reintroduced for a Wall Street Tax with huge purpose.

Take, for example, this passage from the bill’s “Findings.”

“The global crisis cost Americans $19 trillion in lost wealth….American citizens provided the money to stabilize the financial sector…. The global financial crisis, along with wars, unabated and unaddressed climate change, unsustainable tax cuts, and a continuing unemployment crisis, if unaddressed, will deprive a generation of a meaningful role in the larger economy.”

Inclusive Prosperity Act, H.R. 1579, Sec. 2.

Ellison’s bill is attracting support from more members of Congress—Earl Blumenauer (D-OR), Judy Chu (D-CA), John Conyers (D-MI), Barbara Lee (D-CA), James McGovern (D-MA) and Delegate Eleanor Holmes Norton (D-D.C.).

Calling the legislation “remarkable” and “bold,” Rep. Barbara Lee told the press conference that  HR 1579 would address “out-of-control tactics” on Wall Street and would “lead to critical investments for our future—in health and development assistance.”

H.R. 1579 would levy a small sales tax on trading of stocks, bonds, derivates and other instruments.  Brokers carrying out the trades would be charged the tax, unless carried out directly by investors.  Households with adjusted gross incomes under $75,000 would be exempted.  Supporters say the bill would bring real and enduring recovery to Main Street.  It also aims to put a brake on high-speed computer trading, avoid bubbles that destabilize markets and sideline capital, and lower costs of essentials, like fuel and food, whose price spikes are linked to speculative trading.

“High-frequency trades are carried out at ‘blinding speeds,’” said Wallace Turbeville, former Goldman Sachs investment banker and a senior fellow at  Demos, “to the point where 50, 60 or 70 percent are done by ‘robo-traders.’  This does not give value to the economy, it damages it.”

Phots from the press conference.

“Wall Street speculation has become a house of cards, a game of computer-driven bets on bets, far removed from real-world investments in real economic activity,” wrote Ralph Nader in a statement of support for Ellison’s bill. 

“We have all seen the enormous outpouring of support for a financial transaction tax in this country,” said Jean Ross, RN, co-president of NNU, the nation’s largest nurses’ organization. “The Ellison bill has our strongest support and the backing of  millions of members in organizations that endorse Robin Hood –  because it would move the country away from austerity, and all the harm that entails, and raise revenue on the scale needed to rebuild the communities still suffering from the financial collapse of 2008.” 

George Goehl, executive director, National People’s Action, thanked Rep. Ellison for his “courage” and for pushing back against “awful austerity.”  Goehl said that polls indicate that 62 percent of the public support an FTT.  “We have a revenue crisis in America,” said Goehl, “but the good news is that we know where the money is.  It’s not in grandma’s social security check, it’s not in our children’s classroom, and it’s not in the pockets of working class families.  It’s on Wall Street.” 

“The United States has made a commitment to invest in the end of AIDS. Yet, with our current budget crisis this will be impossible, unless we join all of the other major financial markets and implement a Robin Hood Tax.  There is no reason not to do this,” said Jennifer Flynn of Health GAP.  “It’s common sense legislation.”

Erich Pica, of Friends of the Earth, also spoke, expressing support for Ellison’s bill in behalf of his organization’s 150,000 members and its goal to address “uncontrolled climate change.”  He asked, “Does the U.S. have the political will for adaptation that has to occur?” 

“We have an FTT at the gates of Congress,” said Bobby Tolbert of VOCAL-NY.  “With a tiny tax on Big Banks, we can invest in our future by creating jobs, protecting healthcare and solving crises like the HIV/AIDS epidemic and climate change.  It’s the minimal endowment owed by corporate America.”