Tell Congress: Pass an aggressive Wall Street sales tax
Thanks to the activism of the progressive movement, including thousands of CREDO members who have backed a Wall Street sales tax for years, earlier this summer the Democratic Party supported a sales tax on Wall Street speculation in the official party platform for the first time.
But, our work is not done. Fresh on the heels of its inclusion in the party platform, Rep. Peter DeFazio has introduced a Wall Street sales tax bill in the House. If we speak out now in support of an aggressive financial transaction tax, we will help keep the momentum growing and ensure this commonsense idea doesn’t fall off the radar in Congress.
Last year, more than 65,000 CREDO members spoke out in support of progressive champion Rep. Keith Ellison’s bill to impose a tax on Wall Street trades and provide hundreds of billions of dollars in funding for healthcare and infrastructure. A financial transaction tax, also known as a “Robin Hood” tax, is essentially a very small sales tax, just like you and I pay at the store. But instead of taxing the things people need to live their everyday lives, we’re taxing Wall Street’s gambling habit. Best of all, it could raise up to $300 billion each year.
Rep. DeFazio’s new bill is very similar, taxing financial transactions across the board. According the Joint Committee on Taxation, the DeFazio bill would raise around $40 billion every year. Sec. Clinton has voiced support for a similar but more limited tax that would hit high-speed traders who manipulate prices by placing hundreds of orders to drum up demand, and then quickly cancel them.
We will continue to support the strongest possible bill that raises the most money from Wall Street banks that have, for too long, failed to pay their fair share. Right now, the most crucial task is to show that ideas like the financial transaction tax can generate real support when introduced in Congress. Sen. Elizabeth Warren has included a big bank sales tax as part of her agenda for completing the work of Wall Street reform, and this a great chance to push that agenda forward.
Instead of channeling money to investments that create jobs, too much of Wall Street activity today is focused on complicated financial products and risky gambles, with the sole purpose of trying to make a buck. In fact, high-speed traders turn a profit by designing computer algorithms to make millions of tiny profits at lightning speed by buying and holding stocks for less than a second. A sales tax — the same way we tax cigarettes to discourage smoking — would discourage this speculation and slow the growth of the complicated financial products that nearly brought down our economy.
No wonder nearly 40 countries have some form of financial sales tax, and the idea has been endorsed by everyone from Nobel Prize winners to former President George H.W. Bush. The United States even had its own Wall Street sales tax until 1966. And leading economists point out that the result of a new speculation tax would be more productive, long-term trades, not costs passed onto consumers.
It is long past time for America to institute a new, widespread Wall Street sales tax. Let’s get behind this bill in a big way and help set the agenda for this fall and the years to come.
Thank you for speaking out.
- Dean Baker, “Don’t believe Wall Street’s scare stories about a financial transactions tax,” Los Angeles Times, July 25, 2016.
- Rep. Peter DeFazio, “Rep. Peter DeFazio Introduces Legislation to Curb Speculative Wall Street Trading and Bolster Main Street,” DeFazio.House.Gov, July 13, 2016.
- CREDO Action, “Tell Congress: Support the Robin Hood tax on Wall Street gambling.”
- The Robin Hood Tax Campaign, “Everything You Need to Know,” RobinHoodTax.org, retrieved March 22, 2015.
- DeFazio, “Rep. Peter DeFazio Introduces Legislation to Curb Speculative Wall Street Trading and Bolster Main Street,”
- Lynnley Browning, “Clinton Aims Party’s ‘Wall Street’ Tax at Flash Boys, Not Banks,” Bloomberg, July 13, 2016.
- Senator Elizabeth Warren, “‘The Unfinished Business of Financial Reform,’ Remarks as Prepared for Delivery,” Warren.Senate.gov/, April 15, 2015.
- The Robin Hood Tax Campaign, “Everything You Need to Know.”
- Baker, “Don’t believe Wall Street’s scare stories about a financial transactions tax.”
Originally published at act.credoaction.com.