Webster Tarpley: 1% Wall Street Sales Tax to pay for on-budget social Programs

A 1% Wall Street Sales Tax to pay for on-budget social programs. Known under various names (Tobin tax, financial transactions tax, Robin Hood tax), a tax on the sales of stocks, bonds, futures, options and other derivatives is key both to generating trillions in revenue and to reducing the burden of predatory financial speculation.

Such a tax was passed in January 2013 by 11 EU member-nations, including Germany, France and Italy. The Wall Street Trading and Speculators Tax Act, re-introduced in February 2013 by Senator Harkin (IA) and Rep. Peter Defazio (OR-4), provides a template for the US, and is quickly gaining support among economists and activists.

The turnover (transactions) in question, including stocks, bonds, options, futures and derivatives, is estimated to exceed five quadrillion (5,000 trillion) dollars per year. While working class families pay an average of 7% in sales tax for clothing, utilities and even food, hedge fund operators pay nothing. The EU tax and mainstream proposals in the US tax these transactions at anywhere from 0.005% to 0.1% (advocated by Robert Reich). This is not enough! Harkin and Defazio estimate tax receipts of $300 billion over 10 years. In this same period, the Simpson-Bowles commission intends to cut $4 trillion from the budget, mostly from Medicare and other social programs.

The UFAA demands a full 1% Wall Street Sales Tax, to generate trillions in needed revenue. We recommend a $1 million exemption to protect household-level investment, and a requirement that all transactions must be sold over public exchanges and taxed in order to be legally valid.