Part II to Green's response to The Hill article
âVanguard founder John Bogle says he âlovesâ the speculation tax. âThe tax costs to traders are basically zeroâ.. What a complete lie from a mutual fund founder who doesnât like investors trading on their own and prefers passive buying and holding of his long-term mutual fund investments. This tax for very sure puts all our trader clients and active investors out of business over night. If you donât believe me, read the thousands of small-business investors and traders comments on our Petition at
http://www.rallycongress.com/greentradertax-traders-association1/.
Proponents of this tax keep talking out of both sides of their mouth. First itâs âtinyâ and just crumbs, and next it raises 150 billion dollars (a huge amount of tax revenue). A good portion of those dollars wonât come from big Wall Street banks but from the hides of traders and investors of all types â retirees, housewives, unemployed, part time, out of school, early retirees and many more â all scratching to add to their living. Plus, you wonât even collect the taxes from these people, because you will force them out of business. Supply-side economics hits Main Street.
This is the fundamental blind spot of socialists. Squeeze 150 million dollars out of the business marketplace and think you can call it tiny, just crumbs that no one cares about. Itâs the businesses life blood of investors and traders, and killing those businesses has a trickle down effect and multiplier. Your really end up sucking 500 billion or more out of taxpayerâs pockets and that can tank our fragile recover. If you want green energy to take off, make it a great business. Donât force-feed it down consumersâ mouths with overly generous subsidies and tax breaks. There arenât many buyers. Learn the basics about supply and demand and a good business environment, which is not think tank utopians dictating whatâs good business from high on top of the mountain.
âThird, the speculation tax would be extremely progressive. It is self-evident that it is the richest Americans who trade stocks the most. The richest 1 percent of Americans own about 40 percent of the stocks; the top 10 percent own about 80 percent. â Wrong again, 90% of our trader and investor clients are not rich and they are scratching to make a living or add-on to an insufficient living. Your tax puts them on bread lines since they donât qualify for unemployment insurance (even the Stimulus extended ones). This is the most non-progressive tax proposal Iâve seen yet, which is generally the case for sales taxes. Traders pay short term capital gains and they donât benefit from lower long-term capital gains tax rates. This tax is not robbing the rich to pay the poor. Itâs putting the middle class out of business and then not even giving them a social safety net. It clearly is a job destroyer not a job creator of financial service industry jobs, which usually also then kill off several Main Street jobs too (professional and personal services, retail, food, beverage, construction and more). Again, I wouldnât expect a utopian think tank President who survives on charity (hand-outs) from altruists to understand the raw aspects of business and taxation. One thing they know very well is that they enjoy tax-free status as non-profits and many of these institutions abuse that tax-free status too.
âOpponents of the speculation tax sometimes say it will drive financial business overseas. This is implausible. The United Kingdom currently maintains a financial transaction tax, and has been gaining not losing business over the past decade.â Wrong again. The U.K. has exemptions and income tax credits for its stamp duty tax. More importantly, the UK built up its money-center credo by allowing non-domiciled residents to be totally tax-free on offshore investment accounts. This stamp duty was their only way of getting some tax from these non-domiciled residents living in the UK. So you canât compare UK oranges with US apples. In the US, we tax everything on a worldwide basis, and there are no credits or material exemptions in this tax bill. Plus, just wait 6 months while the UK implodes further over their even angrier populism against bankers. UK hedge funds are fleeing to Switzerland, who like Singapore will never pass this crazy tax. You got the other facts wrong too. Germanyâs left-leaning candidate for Chancellor lost the election by recommending this tax (among other socialist ideals) and Chancellor Merkelâs government said an absolute no to this tax too. Bur rest assured you can always count on the socialist guiding light of the world France to carry your torch. They want a global currency tax to pay for climate change.
Before the US trashes its economy and financial services in passing unilateral legislation on climate control and a financial transaction tax, it should wait for the entire world to do the same in consensus. That will probably not happen anytime soon, but we can offer to play nice in the world and work towards these ideals together. Kudos for President Obama, Secretary Geithner and leadership in Congress and the administration to saying no to this progressive-grab-at-the-money tax now, before waiting for global consensus. Itâs just not well thought out no matter how much you use think tank credentials to put lipstick on that pig.
You ended your piece with - âSteeply progressive, revenue generating and well-targeted, look to the speculation tax as one of the big ideas of the coming year.â Wrong. Itâs steeply non-progressive, revenue and job killing and a shot-gun approach to hurt retail investors of all stripes. Listen to our wise Secretary Geithner and the IMF who suggest consideration of a bank levy on banks instead. That would be âsteeply progressive, revenue generating and well-targeted.â
