Today, many
families around the nation will make their way into a Wal-Mart to purchase the
necessities of life — hygiene products, medicine, and, in some states, even food — and be charged anywhere from six to nine percent in sales tax.
Meanwhile, in the same day, the Waltons and their shareholders will make
millions of dollars off of thousands of stock trades — but won’t be taxed a
penny. This is morally unjust and fiscally irresponsible, and it’s well past
time that we institute a federal Financial Transaction Tax [FTT].
An FTT would
leverage only half of one percent (.5%) — or, about 50 cents for every $100 —
on derivative, stock, and bond exchanges. This tax would raise an estimated
$350 billion a year, which could be used for various things: from reducing
poverty, to fixing infrastructure, to investing in education, to strengthening
social security, all the way to funding research that could cure diseases — all
without costing the average citizen a penny.
In addition to
raising revenue, the tax would also defer risky, speculative, and High
Frequency Trading [HFT]. For instance, HFT is a type of algorithmic trading
that destabilizes markets, and fails to produce human or social capital. These
socially useless transactions are based on very small profit margins — hence
the need to trade quick and often — and, by cutting into those margins, this
tax would push these trades out of markets.
It’s also worth
note, because of its modest size, the tax won’t adversely affect small-time,
middle-class traders.
This year’s
congressional session has come to a close, and thus elected officials are
making their way back to their home districts; constituents should be making
the case for a FTT. By merely requiring big banks and financial institutions to
pay taxes in the same way that average citizens do, we could secure a moral and
fiscal victory for the people of this country.
If corporations are people, we ought to tax them as such.
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