One of the biggest challenges that we face as a country is not that we lack money or wealth–we have plenty of money. Rather, we have a distorted set of priorities and an ideological frame that walls off many possibilities to create a decent society. For example: the belief in the so-called "free market" that blesses the piling up of wealth by a few at the expense of the many. So, here is an easy way to break through that frame: Wall Street owes the American people a small return on the investment the country has made in providing bankers and financiers the safe haven to do business (until those same bankers and financiers wreck their own business). And that small return could bring the country $354 billion to provide health care, road, schools and a cleaner environment.
It’s simple: for every stock, bond,foreign exchange, or derivative assets transaction, a very tiny tax is levied on the deal: 0.5 percent. For the individual investor, it is virtually unnoticeable. And, frankly, for the big institutions, it will be tiny as well in the scheme of how much money is reaped from balanced trading.
But, as a whole, we are talking about a lot of money, according to the Center for Economic and Policy Research, one of the leading promoters of the idea: $354 billion based on current trading levels. As CEPR notes: "With a 25 percent decrease in trading volume, an FTT would generate $265 billion annually. And even with a 50 percent decrease, an FTT would raise $177 billion dollars per year."
Without much heavy lifting, we could stifle the voices of those people who would cut Medicare, slash veterans’ benefits or put a crimp in infrastructure investment BEFORE they put a slight brake on the profit-taking on Wall Street.
Which would you choose?
Beyond the obvious revenue for society, one of the things that appealed to me when I wrote about this more than a year ago was the stabilizing effect it would have on the financial system. Though tiny, the tax would presumably cool the most speculative and risky trading that cratered the global economy a year ago.
In the House, Peter DeFazio has introduced H.R. 4191 Let Wall Street Pay for the Restoration of Main Street Act (don’t you love that name?). Tom Harkin will likely be the sponsor of a companion Senate bill. It will not be easy to pass this bill because Wall Street has enormous power in Washington and pours millions of dollars into the pockets of legislators.
So, this idea gives us a pretty good set of choices. On the one hand, we could listen to the people in our party who are running around saying that the government can’t put more money into the economy to put millions of people back to work, that we have to wring our hands and worry about fiscal deficits, that we need to cut "entitlements" and that we can’t "afford" health care.
Or we can be serious about how to take care of the people and who should pay for the decent society we all want to be a part of.
It’s not hard. We just have to have the political will to get it done.