Citizens concerned about our national debt and wheeling and dealing on Wall Street should energetically support Rep. Keith Ellison’s (D-Minn.) “Inclusive Prosperity Act.”
The “Inclusive Prosperity Act” would enact a speculation tax that could help shrink our nation’s deficit while safeguarding and reducing runaway speculative trading on Wall Street.
A small financial transaction tax of 0.5 percent or less – depending upon the financial instrument being taxed – could produce hundreds of billions of dollars annually, perhaps as much as $350 billion. This revenue could be generated from a tax that would be minuscule – half a penny or less on each dollar of the transaction value.
Wall Street speculation has become a house of cards, a game of computer-driven bets on bets, far removed from real-world investments in real economic activity. The now-infamous Wall Street gambits such as credit default swaps and collateralized debt obligations, which attracted billions of investment dollars, put entire national economies at risk.
Wall Street speculation is currently subject to zero sales tax on its trillions of dollars of annual transactions—while consumers regularly pay sales taxes even on daily necessities. Americans in all but five states pay state sales taxes, ranging as high as 7 percent, every time they buy a car, an appliance, a pair of pants or piece of furniture, but a trader on Wall Street can buy and sell millions of dollars’ worth of financial products each day without paying a cent in sales taxes. A teacher or police officer who buys a $100 pair of shoes in the District or Maryland pays $6 in sales taxes. Meanwhile, if a financial speculation tax were applied to stock trades at a rate of 0.25 percent, a day trader would pay just 25 cents on every $100 worth of stock bought.
Led by the National Nurses United, the largest union and professional association of registered nurses in the United States, more than 140 organizations representing millions of members in labor unions, civic organizations and consumers groups have endorsed the passage of the Wall Street sales tax. It is time for Americans from all walks of life to persuade their members of Congress to support this important legislation.