RoseAnn DeMoro appeared on The Real News Network and together with Robert Pollin, Professor of Economics at the University of Massachusetts in Amherst, talked about the financial transactions tax:
ROBERT POLLIN: Okay. So the basic idea of a financial transaction tax is that it’s the equivalent of a sales tax. Right now if you go down the street and you buy a bicycle, if you buy a car, if you buy chewing gum, if you buy a baseball hat, you’re going to pay 6, 7 percent on your sale. So $100 sale, you’re going to pay $6. Right now, every single financial transaction on Wall Street and throughout the world—that is, every purchase of the stock, every purchase of a bond, a derivative, foreign exchange—goes untaxed. So this is an enormous potential source of new tax revenue, even to just come up to something like a degree of fairness relative to a sales tax.Now, if we start with a very modest tax on stocks of 0.5 percent, that would mean $.50 on a $100 purchase of stocks, which would then mean, say, $0.25 for the buyer and the seller, $0.25 on a transaction of $100 of stock. Then if we also tax bonds and derivatives at much lower rates, you can generate around $350 billion a year within the United States. Three hundred and fifty billion dollars a year, that’s more than one-third of the entire federal deficit. It’s more than three times more [than] all the states’ deficits and the austerity programs that they are being forced into. You could cover those three times over just by implementing a financial transaction tax.