Paying Their Fair Share
Two news items caught my attention today:
The top 0.1%– about 315,000 individuals out of 315 million– are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.
The capital gains tax rate has been steadily cut from 35% in 1978 to 15% today. This had assisted the concentration of wealth to a tiny handful of Americans and burgeoning deficit.
Writer Robert Lezner, writing this piece for Forbes.com, comes to the only reasonable conclusion:
I commend you to the late Justice Louis Brandeis warning to the nation that “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” We have to make up our minds to restore a higher, fairer capital gains tax to the wealthiest investor class– or ultimately face increased social unrest.
Proponents argue that the tax would hit financial transactions most prone to dangerous speculation, and make that 0.1% pay their fair share of the tax burden.
The revenue from such a tax would be substantial:
A broad-based FTT (0.5 percent on stocks and options, or about 50 cents per $100 trade) could yield roughly $170 billion in federal revenue annually, according to a study by CEPR and the University of Massachusetts. Oxfam, a leading advocate, says the money should be used for international development. Other proponents suggest deficit reduction, job creation, economic stabilization, global warming prevention and other causes.
The idea has the support of over 1,000 prominent economists from 53 nations, including Paul Krugman and Joseph Stiglitz, and protesters in several European have made the FTT a top priority.
Conservative critics, of course have complained that a FTT would “distort markets”, cause businesses to shut down and be unenforceable…providing no evidence whatsoever. In fact, the London stock market, where an FTT is in effect, has managed to thrive in the face of the allegedly punishing burden.
Sounds like a good idea to me.
- Could a financial transactions tax work for the UK? | Michael Burke (guardian.co.uk)
- Should We Tax Financial Transactions? (theatlantic.com)
- The Robin Hood tax: a big step for capitalism, a major stride for development (guardian.co.uk)
No comments yet.
- Campaign Finance
- Civil Rights
- Fox News
- Health Care
- Health Care Reform
- Media Criticism
- Presidential Campaign
- Tax Debate
- Tea Party
- Wall Street