Skip to comments.Using financial trading taxes to deal with technological unemployment
Posted on 02/25/2013 11:21:20 AM PST by ExxonPatrolUs
Hutchinson recommends a 0.01%-0.02% Pigovian tax on trading stocks and bonds and a 0.05% tax on derivatives to tamp down on such speculation. Its an interesting idea. Not only might it give investors greater confidence in the stock market, the revenue could be used to lower the overall corporate tax rate. In Congress, Democrats Sen. Tom Harkin and Rep. Peter DeFazio are reintroducing their transaction tax bill, which would raise nearly $400 billion over a decade though not lower corporate tax rates. Banking analyst Jaret Seiberg of Guggeneheim Washington Research Group gives it poor odds:
Financial firms have done an excellent job framing this as a tax on retirement savings, as mutual funds and pension funds would pay the tax. That has previously doomed the tax from ever getting serious attention.
For House Republicans, this is nothing more than another tax. We see no appetite among House Republicans for any tax hike, especially one framed as hurting those saving for retirement.
In addition, the Obama administration has never favored the tax.
And if supporters could not get this done during the height of the financial crisis, then it is hard to see how they could pass it now that the crisis is a few years behind us. While we believe legislation will not advance, headline risk is high. The government is desperate for cash and this raises a ton of money. So there will be many opportunities for Harkin and DeFazio to generate attention. And we suspect they will seize those chances.There are also more radical versions of the transaction tax that raise far more money. We suspect to see those reintroduced this year as well.
(Excerpt) Read more at aei-ideas.org ...
So we get taxed on the transactions in our 401K thought it is theoretically not taxed until we retire.