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Bernie Sanders Wants to Raise $2 Trillion by Taxing Wall Street Trading
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=48548"><span class="small">Irina Ivanova, CBS News</span></a>   
Friday, 24 May 2019 08:23

Ivanova writes: "A so-called financial transactions tax could raise between $776 billion and $2.4 trillion over 10 years, economists estimate."

Sen. Bernie Sanders speaks during a town hall at the Fort Museum on May 4, 2019, in Fort Dodge, Iowa. (photo: Stephen Maturen/Getty)
Sen. Bernie Sanders speaks during a town hall at the Fort Museum on May 4, 2019, in Fort Dodge, Iowa. (photo: Stephen Maturen/Getty)

Bernie Sanders Wants to Raise $2 Trillion by Taxing Wall Street Trading

By Irina Ivanova, CBS News

24 May 19


en. Bernie Sanders has put "Medicare for All" and free public college at the center of his 2020 presidential campaign, and he knows just who should pay for the federal programs: Wall Street. The Vermont independent this week proposed a bill that would impose a small tax on trades of stocks, bonds and derivatives. 

Under the measure, any stocks traded would be taxed at a rate of 0.5%, bonds at 0.1% and derivatives at 0.005%. So selling $1,000 of stock would incur a tax of $5. Such a tax could conservatively raise tens of billions of dollars per year, according to the Congressional Budget Office, which estimated the potential revenue at $776 billion over a decade. A 2017 study by the University of Massachusetts concluded a so-called financial transactions tax could yield a far bigger bounty -- $2.4 trillion over 10 years.

"While the top 23 banks in America received over $20 billion in tax breaks last year as a result of the Trump tax plan, hundreds of thousands of young people are unable to go to college because they can't afford it, 34 million Americans have no health insurance, one out of five Americans can't afford to buy the medicine prescribed by their doctors, over 40 million Americans are living in poverty," Sanders said in introducing the legislation.  

Sen. Kirsten Gillibrand is a co-sponsor of the bill; Rep. Barbara Lee, D.-California, is sponsoring the legislation in the House, where it enjoys support among the Democratic party's left flank.

The idea of a financial transactions tax isn't new. Dozens of such proposals have been bubbling since Wall Street's meltdown in 2008 plunged the U.S. into a multi-year recession, with a similar bill introduced this past March. But the policy goes back much further.

Sanders noted that Great Britain has levied such a tax since the late 17th century, while dozens of other countries also use one. In more recent years, France started taxing trades in 2012, and a wider tax went into effect in the European Union in 2017. The U.S. itself employed a transactions tax from 1914 until 1966, when it was eliminated as part of a broader tax cut. Meanwhile, the Securities and Exchange Commission, which regulates some financial products, funds itself via a small tax on entities that trade these products.

Tamping own speculation?

Economists from Nobel Laureate Joseph Stiglitz to former Treasury Secretary Larry Summers have made the case for such a tax. The finance industry opposes it, arguing that it would hurt average investors who would have to pay more to invest or have to make fewer trades.

In fact, research suggests a transaction tax would have the greatest impact on hedge funds and other speculators, which make hundreds or thousands of trades a second, profiting from faster technology or advance information. (In one such instance, high-speed traders paid tens of thousands of dollars in monthly fees to Business Wire in order to get direct access to market-moving press releases, giving them a split-second advantage over competitors.)

While each trade might yield only a fraction of a cent in profit, the sheer volume of trades make it lucrative. Nearly half the volume on a given day is made up of this type of speculative activity, MarketWatch reported in 2017. 

Supporters of a Wall Street tax point to this reduction in speculation as a benefit. It's "skimming the fat off of a sector of the economy that can afford to pay it," the left-leaning Center for Economic and Policy Research wrote during the Great Recession. A Forbes contributor likened it to a cigarette tax: "It would pick up some revenue while discouraging dangerous activity," she wrote.

For the relatively few middle-class investors who might get dinged, the Sanders bill has a carve-out. Any taxpayer earning less than $50,000 whose investment adviser passes on the cost of the trading tax could get the full amount back as a tax credit.

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+11 # DongiC 2019-05-24 09:28
A very clever tax on the rich fat cats. I'm all for it!
+3 # Dale 2019-05-24 10:22
A real socialist measures would be to nationalize banks and turn them into the funders of projects of sustainable development, leaving aside the rip-off of finance capital that pursue degenerative development and self-enrichment
+2 # laborequalswealth 2019-05-25 10:49
Yes Yes Yes

And read Ellen Brown on state banks. They are starting to be discussed all over the country. Why should we give our tax dollars to criminal organizations like Wells Fargo? Let's put those deposits into our OWN bank.

Stop the Beast from using our own money against us!
0 # Robbee 2019-05-24 11:52
Bernie Sanders Wants to Raise $2 Trillion by Taxing Wall Street Trading
By Irina Ivanova, CBS News
24 May 19

in 2016 when bernie first proposed this speculation tax i proposed that he tax one penny for every $20.00 in stock transaction amount - one-half mill per thousand? a rate presumably too low to deter trades? only to regulate rampant speculation?

i proposed this same tax for all transactions, including, for instance, currency transactions - since i see no reason to tax bonds or derivatives or currency at favored rates! advantaging such transactions warps markets! sorry, bernie! no cigar! BUT YOUR SPECULATION TAX IS, in any event, A BRILLIANT INNOVATION for america!



how about it, bernie? stop doing bonds or derivatives or, especially, currency traders favors? what's up with that? anyway? are some forms of speculation? just like some animals on america’s animal farm? more equal than others? - in other words, why do we want to encourage some types of speculation? more than others?
+9 # RLF 2019-05-24 15:58
No one talks about what stock exchanges were originally invented for...financing businesses that were too big for banks but now they have become nothing but an insider traded casino, where speed trading makes money...not picking and investing in businesses that will carry our economy into the future. We need this transfer tax in order to push Wall St. back into it's original occupation if nothing else.
+1 # laborequalswealth 2019-05-25 10:53
Exactly. Wall Street produces NOTHING. It's just massive gambling. It has created phantom dollars on computer screens which have ZERO relation to the real economy, i.e. the production of useful goods and services.
The Wall Streeters (and banksters) then take that counterfeit currency and bid up the cost of essential services like housing against the rest of us who WORK for a living.

Wall Street is a vampire.
+1 # laborequalswealth 2019-05-25 10:47
Frankly, any "investment" not held for more than a few minutes should be taxed at 99%. It produces NOTHING. It has ZERO social value.

"Hedge fund" is just a polite term for thieves with computer screens