By Erin Shields, NOW President’s Intern
If conservatives in Congress continue to refuse to raise taxes on millionaires and billionaires, another approach to try to restore fiscal balance to the federal government needs to be pursued. NOW and allies are supporting a new idea on how to increase revenues and perhaps begin to close the yawning gap between the very rich and everyone else. Nov. 3 launches a week of action in support of this idea, with the theme “Make Wall Street Pay!”
The Financial Transaction Tax (FTT) is a newly-proposed progressive tax to be placed on the transactions between financial institutions. When you, the consumer, purchase everyday goods, a tax is applied during the transaction (in most states). However, large financial institutions in the U.S. pay nothing when making million and billion dollar transactions. The FTT would place a 0.1 to 0.01 percent tax on these sales or transfers of stocks, bonds and other financial assets. Though the tax itself is minuscule, it would raise enormous amounts of revenue, upward of $350 billion — an excellent alternative to cutting services to low-income people, retirees and people with disabilities, which the congressional “super committee” is now considering. In addition to the increase in revenue, the FTT would create stability within the market by discouraging speculative trading (high-volume, high-speed trading, which feeds off volatility in the market).
On Nov. 3, a Financial Transaction Tax will be up for discussion at the G20 Summit. France and Germany have expressed strong support for the tax, and in September, the European Union (EU) proposed an EU-wide transaction tax. European Commission President Jose Manuel Barroso is backing the proposal, which would tax stock and bond trades at 0.1 percent and derivatives at 0.01 percent. With a number of EU countries, such as Greece, in serious financial straits, and the richer EU countries having to bail out their indebted EU partners, it seems likely that the FTT will be adopted in Europe.
The idea is popular with some Democrats in Congress: Rep. Pete DeFazio of Oregon introduced the Let Wall Street Pay for the Restoration of Main Street Act (H.R. 4191); Sen. Tom Harkin of Iowa has introduced the Wall Street Fair Share Act (S. 2927); Rep. Pete Stark has a more modest approach in his H.R. 755, which would impose a small tax of 0.0005 percent on currency transactions; and Rep. John Conyers of Michigan, under the 21st Century Full Employment and Training Act (H.R. 879), would trigger a similar creation tax to support a direct jobs program.
While leaders meet to address the ongoing economic crisis, consumer advocates and union allies plan to send a clear message to Congress and the White House: “Tax Wall Street!” International Week of Action: Make Wall Street Pay will kick off on Thursday, Nov. 3. Activists will rally at 11:30 am at Lafayette Square in Washington, D.C., followed by congressional lobbying on Capitol Hill at 3:00 pm.
A number of groups are supporting the Nov. 3 action, including: National Nurses United, AFL-CIO, National People’s Action, United Students Against Sweatshops, Progressive Democrats of America and Healthcare-NOW — with the list growing every day. More information (PDF).