Finally one Senator proposes to tax speculators! It's our own Tom Harkin. His tax on Wall Street is so small (.03%, or three cents on a hundred dollars of wheeling and dealing) that it won't affect real investors at all. Your next car loan won't be taxed by this plan because first transactions are not covered. But if the banksters collect thousands of car loans (or home mortgages) and resell them as fool's gold to Wall Street clients, well, then the tax is due from those trades.
Only two other Senators sponsor the bill and neither is named Charles Grassley. A handful of Congressman are behind a House bill, including Iowa's Bruce Braley. Someone should tell Boswell and Loebsack to get in gear.
The tax would raise more money in one year than the cost of the jobs bill that Republicans filibustered to death last month: $35 billion. It would curb speculation where traders try to make a penny or two on each share in a huge transaction, such as in high speed trading of stocks. Did you know the average share of stock is owned by its "investors" for only 22 seconds?!!! Our whole stock market is more speculative churning than it is real investing. Did you ever notice how the newscasters give the market report every hour?
Farmers who complain about all the speculators in the corn market will love Harkin. Drivers who want speculators to get out of the oil market will love Harkin. Europeans who are proposing the same tax will love Harkin. Wall Street will wail. Obama opposes the tax, too. Surprise, surprise.
Sometimes known as the Tobin tax, this idea dates back to John Maynard Keynes eighty years ago. Tobin and Keynes could see the danger in speculators run amok. We live in the aftermath of their mess from the housing bubble. It's time they paid a teeny, tiny tax.
Thank Harkin here: Thanks, Tom.
Fantastic blog! Thanks.
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