A new TAX they can hide

This article is from the far left site:  The Nation

Financial Transactions Tax Introduced Again—Can It Pass This Time?

Just like the Congress before this, and the one before that, the 113th Congress will have a financial transactions tax to consider—and its backers are confident that, this time, they can make it law.

Thursday morning in the US Capitol, Senators Tom Harkin and Sheldon Whitehouse, along with Representative Peter DeFazio, announced the latest version of a tax on Wall Street trading: it would place a small tax of three basis points (that is, three pennies for every hundred dollars) on most non-consumer trades. Senator Bernie Sanders is also a co-sponsor of the legislation, as are nineteen members of the House.

If enacted, the tax would generate $352 billion in revenue over the next ten years, according to the Joint Committee on Taxation. It would apply to traded stocks and bonds, derivative contracts, options, puts, forward contracts, swaps and other complex Wall Street instruments. It would not cover the initial issuance of any stocks or bonds, nor covers or loans in the form of stock.

Three pennies per one hundred dollars would not be noticeable to most retail operations and average Americans—someone with a 401(k) balance of $60,000 (the median in the United States) would pay $18 per year in financial transactions taxes under this bill, and it contains a tax credit to cover the cost of the tax for contributions to tax-benefitted pension, health and education plans.

This transactions tax would most notably impact high-frequency traders—and this is a feature, not a bug. High-speed trading presents a real threat to the economic system and would theoretically be slowed if the bill is passed. DeFazio said the measure would “bring more stability to the financial markets, favoring long-term value investors—those who want to build an economy.”

Why might this bill succeed, where others have failed? For one, the international landscape is changing—eleven Eurozone countries are planning to implement a financial transactions tax at the beginning of next year, and are urging the United States to join the effort. (The European version calls for ten basis points.)

The sequestration and continuing resolution fights present another opportunity to wedge a Wall Street tax into the discussion. If Republicans eventually come off their intransigence against raising any new revenue, they will be looking for ways to do it while lowering rates, and the transaction tax presents a great opportunity to achieve that. “I have to ask, what other options are there for raising $350 billion with such a negligible impact on middle-class Americans and Main Street businesses?” said Harkin.

A staff turnover at the White House has also encouraged the bill’s sponsors. At Thursday‘s press event they shared some of their experiences with past administration officials, including some details that were not public until now.

DeFazio noted that in 2009 Obama was “very interested” in a financial transactions tax, but said “unfortunately it was assigned to Larry Summers and Timmy Geithner, who were both absolutely opposed to it, and they deep-sixed it and never brought anything back to him.” (This was reported in Ron Suskind’s book Confidence Men.) “Well, they’re both gone, thankfully,” said DeFazio.

– See more at: http://www.thenation.com/blog/173134/financial-transactions-tax-introduced-again-can-it-pass-time?rel=emailNation#sthash.5FUQx4GP.dpuf

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