Open thread for night owls. Baker: Financial transactions tax would attack income inequality
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Dean Baker at Jacobin magazine writes—A Job-Killing Robot for Rich People: A financial transactions tax would attack income inequality by attacking the finance industry. Some excerpts: In the last couple years, the financial transactions tax (FTT) has moOpen thread for night owls. Baker: Financial transactions tax would attack income inequality
Dean Baker at Jacobin magazine writes—A Job-Killing Robot for Rich People: A financial transactions tax would attack income inequality by attacking the finance industry. Some excerpts: In the last couple years, the financial transactions tax (FTT) has moved from a fringe idea to a policy proposal treated seriously by even the mainstream of the Democratic Party. The decision by Senator Bernie Sanders to make it a central part of his presidential campaign certainly helped, but a number of members of Congress, including Keith Ellison and Peter DeFazio, have also pushed FTT proposals for many years. The FTT is also gaining momentum overseas. There’s a push to enact an FTT in the eurozone. And in England, an expanded FTT — the London stock exchange has long levied a 0.5 percent tax on stock trades — was included in the Labour Party’s platform in the recent election. But while the idea of taxing financial transactions is growing more popular, even many of its proponents don’t realize its full benefits. An FTT is usually seen as a way to raise large amounts of revenue (in the US, it could possibly generate as much as $190 billion a year, or 1 percent of GDP). Or it is viewed as a means to limit speculative trading in the financial sector, potentially making markets less volatile. The best argument for an FTT, however, is that it can sharply reduce some of the highest incomes in the economy by curtailing the trading that makes those incomes possible. As a result, it can play a large role in reversing the upward redistribution of income that we’ve seen over the last four decades. [...] Of course, the attack on the financial sector can and should go beyond imposing an FTT. Much of the profit in private equity stems from tax gaming and abusing bankruptcy law. If we eliminated the opportunities for gaming (most importantly, the tax deduction for corporate interest payments), the high earners in private equity would take a big hit. There are other areas in which the financial sector is purely predatory, such as the excessive fees charged on retirement accounts or the management fees charged to public pension funds. If these avenues for getting rich were closed off, the opportunities for very high-paying jobs would be substantially reduced. While this would not directly fix a broken corporate governance structure that allows for outlandish CEO pay or address the arcane licensing rules and immigration restrictions that allow many medical specialists to earn more than $500,000 a year, whacking the financial sector would be a very good start in reversing rising inequality. And as a bonus, we could use the money raised to pay for free college or other good things — rather than letting it continue to line the pockets of investment bankers. • An Activists’ Calendar of Resistance Events • Indivisible’s list of Resistance Events & Groups TOP COMMENTS • HIGH IMPACT STORIES TWEET OF THE DAY xStop saying millions of people will die if they pass this bill - they donâÂÂt care. Tell them a bank will die— Hippo (@InternetHippo) June 27, 2017 BLAST FROM THE PAST At Daily Kos on this date in 2006—Campaign Finance Reform: Moving Forward: On today’s Kagro in the Morning show, we don’t let Medicaid repeal distract us from Syria, nor let Syria distract us from Medicaid repeal. Armando joins in to round up the recent SCOTUS activity and comment on the procedure & the chaos, which he does entirely without resort to emojis of any kind. x Embedded Content YouTube | iTunes | LibSyn | Keep us on the air! Donate via Patreon or Square Cash Read more