Proving That Tea Partiers' Anti-Tax Extremism Isn't Even Loved by All Conservatives
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Of course the financial industry is apoplectic about the idea of a tax on their activities – even one as minuscule as the 0.25 percent max proposed in the pending bills. Their favorite argument is that it will hurt the little guys. In reality, a financial speculation tax would target the hedge fund investors and other high fliers in the global casino who make most of their money through high-frequency betting on short-term market movements that often have little to do with what's going on in the real economy. Since the tax would apply to each of these transactions, it would make this type of speculative gambling much less profitable and encourage more long-term, patient investment.
For ordinary investors whose portfolios turn over relatively infrequently, the tax would hardly be noticeable. Moreover, the pending House and Senate bills include exemptions for pension and individual retirement accounts and the first $100,000 of trades made by an individual each year.
No one claims that taxing speculation will solve all our problems. It won't single-handedly prevent another financial crisis. It won't create all the jobs we need or solve all our other economic problems. But combined with other sensible financial regulations, it could take us a long way toward reining in Wall Street and meeting urgent social and environmental needs.
So let’s hope the Europeans continue to stand tough on this. We need all the help we can get to move this in the U.S. political landscape. And let’s also work toward a day when pro-tax, bank-bashing politicians are standing on the right wing of our own political spectrum.