It is an important tax for the USA with estimates of treasury income to $100 Billion annually. This tax would stabilize the rapid transactions to be instituted by private firms with their high speed cable which will rob pennies a second from investors. It will give them pause to their exploitative intent to control wealth unilaterally. This tax is a requirement to equitable trading.
For Immediate Release: February 28, 2013
Washington, D.C.-The Center for Economic and Policy Research (click here) released the following statement from co-director Dean Baker on the introduction of the Harkin-DeFazio bill:
"The Harkin-DeFazio bill provides a way to raise a substantial amount of revenue while at the same time making our financial markets more efficient."
"The modest tax would discourage an enormous amount of short-term trading while having almost no impact on the ability of markets to finance productive investment. The cost of the tax would be born almost entirely by the financial industry, since for most investors the money saved as a result of lower trading volume will offset the higher cost of trades.
"At a time when Congress and the President are looking to cut Social Security, Medicare, and other essential programs, the idea of getting $40 billion a year from taxing speculation in the financial industry looks very attractive."
The bill is out of committee and once on the Senate floor it would be more than interesting to find the lack of a filibuster or not. The markets are complaining it would cause such incredible harm to them and even Obama's nominee Jack Lew is complaining it would be adverse because the investment community would have incentive to under report and literally rob the treasury. That seems to me to be the most lame excuse I have ever heard to institute a tax that would not only return equity to traders without incredibly high speed access to the markets, but, provide revenues to the USA Treasury.
WASHINGTON |
U.S. President Barack Obama's Treasury Secretary (click here) nominee Jack Lew, in a written response to a Republican senator weighing his nomination released on Monday, said the White House still opposes the tax.
"The administration has consistently opposed a financial transaction tax on the grounds that it would be vulnerable to evasion, create incentives for financial reengineering and burden retail investors," Lew said.
Little support has emerged in Congress for instituting such a tax, which is firmly opposed by Wall Street banks.
This is the case even though 11 European Union countries, including Germany and France, this month agreed to a trading tax that would raise up to $45 billion (29.6 billion pounds) annually.
Lew, expected to win Senate confirmation as early as this week, also cited scepticism from the International Monetary Fund about the tax in a statement answering questions from Orrin Hatch, the top Republican on the Senate Finance Committee.
The EU tax would be set at 0.01 percent for derivatives and 0.1 percent for stocks and bonds. Further approvals are needed in the EU before the transaction tax becomes a reality.
At a Washington think-tank seminar on Monday, European Union tax commissioner Algirdas Semeta said the only way to avoid the tax would be to give up all financial trading in the countries where it will be imposed....
By Albany Tribune -- (February 28, 2013)
...“The Harkin-DeFazio bill (click here) provides a way to raise a substantial amount of revenue while at the same time making our financial markets more efficient.”
“The modest tax would discourage an enormous amount of short-term trading while having almost no impact on the ability of markets to finance productive investment. The cost of the tax would be born almost entirely by the financial industry, since for most investors the money saved as a result of lower trading volume will offset the higher cost of trades.
“At a time when Congress and the President are looking to cut Social Security, Medicare, and other essential programs, the idea of getting $40 billion a year from taxing speculation in the financial industry looks very attractive.”
Yesterday, Robert Reich stated "The Sequester" was conceived as a Tea Party political strategy after their rash of victories in 2010. They have since lost seats in the House. But, Reich goes on clearly to illustrate how "The Sequester" (which the word is best assigned to the living agreements of Pope Emeritus Benedict and the Rome Catholic Church) was the devil's spawn to implode the federal government.
Posted 28 Feb 2013
...Sequestration is only the start. (click here) What they set out to do was not simply change Washington but eviscerate the U.S. government — “drown it in the bathtub,” in the words of their guru Grover Norquist – slashing Social Security and Medicare, ending worker protections we’ve had since the 1930s, eroding civil rights and voting rights, terminating programs that have helped the poor for generations, and making it impossible for the government to invest in our future.
Sequestration grew out of a strategy hatched soon after they took over the House in 2011, to achieve their goals by holding hostage the full faith and credit of the United States – notwithstanding the Constitution’s instruction that the public debt of the United States “not be questioned.”
They elicited a binding agreement to large, arbitrary (“sequestered”) spending cuts if they and the Democrats couldn’t come up with a more reasonable deal in the interim. But they had no intention of agreeing to anything more reasonable. They knew the only way to dismember the federal government was through large spending cuts without tax increases....
Reich is closer to the truth than anyone wants to admit. Discussions outside of DC noted that rhetoric regarding the nation's equity even with a large budget is intact. There was openness to the ability of the administration to fund the budget without cuts and the political Washington rhetoric caused the assault against CREATING JOBS.
No doubt that is the case, however, there is the issue beyond the budget to the nation's debt crisis. To that end cuts are a way to begin to absorb the nation's debt. I have no doubt Mr. Reich and others are correct in stating the nation's budget is funded which is different than balanced. But, the national debt needs to be funded as well. So, while 10 percent seems draconian to many when the USA still needs to elicit a higher jobs opportunity, there is the issue of the debt and it's interest.
Traders work at the DAX Index curve at the Frankfurt Stock Exchange on Sept. 12, 2011.
Traders work at the DAX Index curve at the Frankfurt Stock Exchange on Sept. 12, 2011.
Nov 2, 2011 @ 3:28 pm (Updated 3:31 pm) EST
...A measure written by Sen. Tom Harkin, D-Iowa, and Rep. Peter DeFazio, D-Ore., (click here) would place a 0.03% levy on financial trading in stocks and bonds at their market value. It also would cover derivative contracts, options, puts, forward contracts and swaps at their purchase price.
“A financial transactions tax is essentially a sales tax on investors,” Kenneth Bentsen Jr., SIFMA executive vice president for public policy and advocacy said in a statement. “At a time when we face a slow economic recovery, such a tax will impede the efficiency of markets, and impair depth and liquidity, as well as raise costs to the issuers, pensions and investors who help drive economic growth.”...
...Financial markets in countries that have adopted a financial transactions tax have suffered asset price decreases, lost businesses to other countries and experienced a loss of liquidity, Mr. Bentsen added.
Mr. Harkin implied that the financial industry is crying crocodile tears over a small charge on daily trading.
“This measure is not likely to impact the decision to engage in productive economic activity,” Mr. Harkin said. “There's no question that Wall Street can easily bear this modest tax.”
The point is to curb the high-frequency trading that injects volatility into the market and turn the attention back to capital formation, according to Mr. DeFazio.
“They don't make things,” Mr. DeFazio said of Wall Street. “They don't feed people. They churn. We have to begin to rebuild the real economy.”...
This tax is more than simply income to the USA, it is necessary to assist other countries, including allies, to stop cross border movement, too. The EU tax begins in 2014. Wall Street is already seeking to evade the transaction taxes globally in markets where they are instituted. For the USA to undermine the European Union's tax is unconscionable. The EU needs to income, their countries populous is smaller and their treasuries more vulnerable to global impacts, so tax in the USA will also provide stability to global initiatives to create equity in the markets. This is more than simply looking for monies for the USA Treasury, it will provide stability in the global markets where it is direly needed.
"Taxing the Speculators" (click here)
By PAUL KRUGMAN
Published: November 26, 2009
Should we use taxes to deter financial speculation? Yes, say top British officials, who oversee the City of London, one of the world’s two great banking centers. Other European governments agree — and they’re right.
Unfortunately, United States officials — especially Timothy Geithner, the Treasury secretary — are dead set against the proposal. Let’s hope they reconsider: a financial transactions tax is an idea whose time has come.
The dispute began back in August, when Adair Turner, Britain’s top financial regulator, called for a tax on financial transactions as a way to discourage “socially useless” activities. Gordon Brown, the British prime minister, picked up on his proposal, which he presented at the Group of 20 meeting of leading economies this month.
Why is this a good idea? The Turner-Brown proposal is a modern version of an idea originally floated in 1972 by the late James Tobin, the Nobel-winning Yale economist. Tobin argued that currency speculation — money moving internationally to bet on fluctuations in exchange rates — was having a disruptive effect on the world economy. To reduce these disruptions, he called for a small tax on every exchange of currencies....
Ya think? Of course, since 1972, Mr. Tobin has been proven to be absolutely correct. It is time to stabilize the markets and side with allies.
And here a second source stating the same thing as Dr. Krugman.
FACTS & MYTHS ABOUT A FINANCIAL SPECULATION TAX (click here)
Updated December 2011
- An FST would reduce dangerous financial market speculation. Since the tax would hit high-volume, high-speed trading the hardest, it would serve to discourage short-term speculation in financial markets as well as the proliferation of ever more complex derivatives. More complex financial instruments could be subject to the tax many times over, substantially
reducing the potential profits from such complexity.
No one can object to the reality foreseen by a Nobel Laureate over forty years ago. The foreshadowing is more of a measure to the truth than anyone is willing to admit.
There is no saying "NO VOTE" to this tax. It is well studied and needs to be applied. This is not a shoot from the hip measure. It is necessary as well as prudent.
By PAUL KRUGMAN
Published: November 26, 2009
Should we use taxes to deter financial speculation? Yes, say top British officials, who oversee the City of London, one of the world’s two great banking centers. Other European governments agree — and they’re right.
Unfortunately, United States officials — especially Timothy Geithner, the Treasury secretary — are dead set against the proposal. Let’s hope they reconsider: a financial transactions tax is an idea whose time has come.
The dispute began back in August, when Adair Turner, Britain’s top financial regulator, called for a tax on financial transactions as a way to discourage “socially useless” activities. Gordon Brown, the British prime minister, picked up on his proposal, which he presented at the Group of 20 meeting of leading economies this month.
Why is this a good idea? The Turner-Brown proposal is a modern version of an idea originally floated in 1972 by the late James Tobin, the Nobel-winning Yale economist. Tobin argued that currency speculation — money moving internationally to bet on fluctuations in exchange rates — was having a disruptive effect on the world economy. To reduce these disruptions, he called for a small tax on every exchange of currencies....
Ya think? Of course, since 1972, Mr. Tobin has been proven to be absolutely correct. It is time to stabilize the markets and side with allies.
And here a second source stating the same thing as Dr. Krugman.
FACTS & MYTHS ABOUT A FINANCIAL SPECULATION TAX (click here)
Updated December 2011
- An FST would reduce dangerous financial market speculation. Since the tax would hit high-volume, high-speed trading the hardest, it would serve to discourage short-term speculation in financial markets as well as the proliferation of ever more complex derivatives. More complex financial instruments could be subject to the tax many times over, substantially
reducing the potential profits from such complexity.
No one can object to the reality foreseen by a Nobel Laureate over forty years ago. The foreshadowing is more of a measure to the truth than anyone is willing to admit.
There is no saying "NO VOTE" to this tax. It is well studied and needs to be applied. This is not a shoot from the hip measure. It is necessary as well as prudent.
