A Speculation Tax to Ignore

Ralph NaderRalph Nader has written a very good OpEd in the Washington Post on taxing stock trades. I fully expect that Dean Baker will write about this tomorrow, because this is one of his big issues. But I thought Nader laid out the case very well. The basic idea is that the government would levy a 0.5% tax on all financial trades.

There are many reasons why this is a good idea. What I most like about it is that it would put a serious dent into the practice of micro-trades. These are high speed trades done by computers. These not only don’t do what trades are supposed to do: get money from those who want to invest to businesses that need capital. They are often actively harmful and pose a constant risk of disaster. I know far too much about computers and programming to feel comfortable with this practice.

Nader points out that the United States had such a tax from 1914 through 1966. So what’s the big deal? The big deal is that stock traders don’t want this kind of thing because it would cut into their profits. And stock traders have a lot of money, so the government is very likely to listen to them. But as Nader notes, we already have taxes on regular economic transactions. Here in California, this tax is at least 7.25% and where I live it is 8.5%. There is no similar tax on stock trades, even though they are the in no way different.

A report from the Political Economy Research Institute (pdf) indicates that such a tax could raise as much as $350 billion annually. That’s over 10% of the total projected revenue for 2013. Compare this to the $11 billion that would be generated by raising the Medicare eligibility age.

I recommend reading the whole article. It isn’t long and it is very clear. Nader deals with all the possible criticisms of the idea and discusses its main advantages. It is a great idea. And thus, both Washington and the mainstream media will likely treat it with the aggressive indifference they treat every idea that rich people don’t like.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

0 thoughts on “A Speculation Tax to Ignore

  1. Of course nobody listens to Nader now. His influence, and the galloping hordes of young activists he inspired, practically created the business/conservative backlash currently in power and seemingly unassailable. Things, however, tend to change, for better or worse.

    Watching the documentary film "An Unreasonable Man" with my SO, I was amused by GM’s attempt to discredit Nader with the "honey trap" — they sent a cutie to seduce him and failed. The SO did not find this funny, instead suggesting that Nader exhibited all the signs of Asberger’s Syndrome (a type of autistic disorder.) It would certainly explain how a guy can keep plugging away, year after year, writing book after book and one sensible suggestion after another, even though he’s been marginalized by assholes since the late ’70s.

    I did enjoy his "Only The Super-Rich Can Save Us!" It’s insane, but in a fun way (it’s the comeback to "Atlas Shrugged" you mentioned elsewhere.) Wealthy mega-dicks get together at a luxury resort and, strangely, make a plan to revive democracy. What’s odd about this book is I don’t know if Nader means it as satire or genuinely hopes mega-dicks will do as it suggests. You never know with him; he takes "painfully earnest" past even my level.

    I hope he lives forever . . .

  2. @JMF – SO?! Now I’ve got a handle on your age!

    Nader could have Asberger’s. He is strangely unemotional. But his concerns seem to be rooted in an empathy that he simply doesn’t show in a normal way.

    I do think that Nader never should have been a political candidate. It isn’t him. It is interesting to watch Elizabeth Warren and how easily she has become a politician. (It saddens me, but I’m glad she’s done it.) Of course, that’s what’s great about Nader. It did not change him. I’m not sure that anything could.

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