CAP: 5 Reasons the World Is Catching on to the Financial Transaction Tax

[pampango]

Campaigners and European trade unions dress as Robin Hood while calling on European Union
leaders to go ahead with a financial transaction tax to mobilize money to help poor people hit by
the economic crisis, in front of the European Council building in Brussels on May 23, 2012.

A financial transaction tax would bring in much-needed revenue

The U.S. government is currently operating at its lowest level of revenues in more than 60 years. A 2010 report from the International Monetary Fund identifies the financial sector of the economy—particularly in the United States—as substantially undertaxed.

A financial transaction tax helps stabilize volatile financial markets

An astounding share of transactions on financial markets today consists of high-frequency trades made on the millisecond by computers programmed with sophisticated algorithms. The computers make large-volume trades based on tiny changes in prices—fractions of a penny—and, in so doing, reap tremendous trading profits. While economic theory might suggest that this would lead to slightly more efficient financial markets, the Bank of England’s Andrew Haldane has shown that “high-frequency trading appears to have amplified” the markets’ erratic undulations.

A financial transaction tax incentivizes investment for real growth

By changing the incentives that investors face in U.S. financial markets, a tax on financial trading will shift behavior toward investment for the long term, which is better for financing businesses and for stable sustained economic growth.

Many countries already have a financial transaction tax

The standard stalling tactic for bringing a financial transaction tax to the United States is saying that we should wait until other countries do it first. But financial transaction taxes already operate in at least 23 countries around the world—including in international financial centers such as the United Kingdom, Switzerland, Hong Kong, and Japan—and that number is about to grow. On January 22, 2013, 11 of the European Union’s 27 member countries, including France, Germany, and Italy, indicated their intention to initiate a financial transaction tax. As the policy nears implementation, other EU countries are certain to get on board. Of the world’s major financial centers, only the United States has no tax on financial trading.

http://www.americanprogress.org/issues/economy/news/2013/02/25/54503/5-reasons-the-world-is-catching-on-to-the-financial-transaction-tax/

Wall Street has fought and will continue to fight this. We will soon be the only developed country without a FTT.

[Teamster Jeff]

1. This makes so much sense

that it's hard to imagine it ever passing here