Transferring The Debt With A Transfer Tax
In the great tax debate now going in Washington, why aren’t we hearing someone in the negotiating loop talk about taxing high frequency trading? That question came to my mind the other day when I heard an interview on Public Radio’s ‘Here & Now’ show with John Bogle, founder of the Vanguard Funds.
Such a tax is certainly not a new idea. It has been batted around for years. It has won support in Europe, except from the U.K. whose government has such close ties to The City, England’s Wall Street. Its been most publicly opposed here by our own Treasury Secretary, Tim Geithner, a long time friend and promoter of Wall Street interests.
High frequency, high volume trading accounts for a large percentage of all stock trading these days. Bogle, a man with the kind of background that makes his opinions worth listening to, didn’t seem to view this as benefiting anyone but big volume traders (hedge funds, et. al.).
A transfer tax on ultra short-term investing would thus not only bring in much needed revenue to the federal government, Bogle said it would stabilize the market economy and be fairer for all investors. It would let companies focus on the growth of their companies instead of the next 40 seconds. It would be far better for the economy as a whole as well for a revenue-starved government.
Maybe it is time, past time, to have such a transfer tax on this ultra short-term investing. It would be a whole lot better for the 99% of us Americans who were so badly hurt by a fiscal meltdown inspired by risky speculation run rampant.
Until Mr. Bogle’s interview, it’s been quite a while since I’ve heard anyone mention this idea in anything except a pejorative way. Not in the major media anyway, and most certainly not from the politicians who are right now struggling through negotiations on how to shrink the national debt.
Could this be because money has more political clout than ever? Hmm, could it be because Wall Street billionaires want pay back for their political contributions?
So which is fairer? Encouraging the super rich to gamble with nano-second trading, or stabilizing the market to make it safer and fairer while reducing the need to cut back on food stamps and Medicaid?
I know my choice. What’s yours? Perhaps we should also ask our legislators what’s their choice.