10 Ways to Force the Stinking Rich to Share Their Wealth
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Obama supports reinstating the pre-Cheney 20 percent capital gains tax, and Congress doesn't have to lift a finger to restore it—the Cheney cut expires at the end of this year. As always, be on the lookout for heavy lobbying from Wall Street.
4. Tax Financial Speculation
We all know that rampant financial speculation fueled the housing bubble that led the
Either way, taxpayers win. But even with a transactions tax much smaller than that deployed in the U.K., Dean Baker, co-director of the Center for Economic Policy and Research, calculates the government could bring in $100 billion a year (pdf), even if financial speculation dropped by 25 percent as a result of the new tax. That's actually a very conservative estimate, since Baker's calculations are based on trading volumes from 1997, which are much lower than those today.
Impose a Wall Street Bonus Tax
Wall Street bonuses are obscene, and everybody knows it. Taxing the hell out of them is one way to rein them in. Rep. Dennis Kucinich has proposed a 75 percent tax on banker bonuses, and Wall Street has a $150 billion bonus pool.
6. Tax Too-Big-To-Fail
Remember President Obama's big push earlier this year to tax too-big-to-fail banks? It was a good idea, but it actually could have been much stronger. Obama decided to try and tax big banks in order to pay off the $117 billion loss that taxpayers are expected to take from the Troubled Asset Relief Program. But his tax didn't actually do that—it would have recouped $90 billion over 10 years, although Obama vowed to keep the tax in place until the full $117 billion was recouped, something Obama himself would have no way of ensuring.
But there's no reason why we should settle for even $117 billion from giant banks, whose failure puts our entire economy in jeopardy. By establishing much more onerous tax rates for banks with assets above a certain level—say, $300 billion—the government could actively discourage banks from becoming too-big-to-fail. If banks didn't downsize, taxpayers would at least benefit from some upside in the arrangement. As it stands, big Wall Street banks take home the profits while we eat the losses.
Sadly, even Obama's weak version of the too-big-to-fail tax has evaporated amid heated Wall Street lobbying.
Restore the Estate Tax to Pre-Bush Levels
One of Bush's major tax cuts was literally a boon for rich kids. When wealthy parents die, the government taxes the inheritance their children can receive. (Conservatives refer to this as the "death tax.") It's a tax on millionaires—before Bush, estates worth with up to $1 million ($2 million for couples) were totally exempt from the tax. Bush cut the tax rate on these inheritances from 55 percent to 45 percent in 2001, but he also phased in other cuts in increments, excluding more millionaires from the tax. By last year, inheritances worth up to $3.5 million ($7 million for couples), were totally exempt. If Obama hadn't acted last year, the estate tax would have been wholly obliterated.