The Robin Hood Tax

[HeluCopter29]

http://www.robinhoodtax.org/

Basically it's sorta like sales tax but for wall street. The percent varies per transaction size but doesn't get higher then .5%. It would apparently raise large amounts of revenue. $265 billion if trading volume were to decrease by 25%. $353.8 billion if no trading decrease.

I think it's a good idea. What are your thoughts?

All the math is here: http://www.cepr.net/documents/publications/ftt-revenue-2009-12.pdf

[chipwhich]

It doesn't solve any debt problems, just pays for tax increases for the standard pork line items.

[HeluCopter29]

It doesn't solve any debt problems, just pays for tax increases for the standard pork line items.

Well I wouldn't sneeze at dropping a quarter of the deficit. That much less to cut from non pork line items.

[chipwhich]

Well I wouldn't sneeze at dropping a quarter of the deficit. That much less to cut from non pork line items.

The national deficit is 17 trillion and you are talking about billions of dollars?????????????????????

[HeluCopter29]

The national deficit is 17 trillion and you are talking about billions of dollars?????????????????????

you're confusing the debt and the deficit.

Debt=17 trillion

Deficit=1.2 trillion.

[chipwhich]

you're confusing the debt and the deficit.

Debt=17 trillion

Deficit=1.2 trillion.

Not confusing anything, what you are proposing is your wife saying hey we owe a trillion dollars in this years credit card debt and you are saying I can save you a million.

It's not solving anything.

[HeluCopter29]

Not confusing anything, what you are proposing is your wife saying hey we owe a trillion dollars in this years credit card debt and you are saying I can save you a million.

It's not solving anything.

To pay off the $17 trillion debt, we have to stop spending more money then we're taking in.

We spend $1.2 trillion more then we take in, AKA the deficit.. There is no singular fix that will solve that problem.

This is one thing that we, as a country, should probably consider in order to fix the issue.

[chipwhich]

To pay off the $17 trillion debt, we have to stop spending more money then we're taking in.

We spend $1.2 trillion more then we take in, AKA the deficit.. There is no singular fix that will solve that problem.

This is one thing that we, as a country, should probably consider in order to fix the issue.

Medicare Social Security and Defense are where the cuts need to be made to "fix" the problem. It's pretty singular.

[HeluCopter29]

Medicare Social Security and Defense are where the cuts need to be made to "fix" the problem. It's pretty singular.

Apparently there's other options.

See: The Robin Hood Tax

---------- Post added January-16th-2013 at 12:22 AM ----------

Medicare Social Security and Defense are where the cuts need to be made to "fix" the problem. It's pretty singular.

Also, you know that medicare and social security have NO affect on our current budget issues, right?

[chipwhich]

Also, you know that medicare and social security have NO affect on our current budget issues, right?

Yeah it's already paid for right You might want to dig a little deeper.

[88Comrade2000]

A 2% national sales tax would raise a lot of money, For the lowest income rate that still pays income taxes- lower their rate.

I would also have a 2% restaurant tax to help fund obamacare.

[Burgold]

The national deficit is 17 trillion and you are talking about billions of dollars?????????????????????

Ya gots to starts somewhere. Pennies do add up.

I'm wary of going after investment capital for somewhat selfish reasons, but honestly, it wouldn't take me out of the stock market. Seems to me that anyone who would be forced out for a percent or less is doing really poorly as an investor and therefore all the losses wouldn't help them or the government in any case.

[Thiebear]

The national deficit is 17 trillion and you are talking about billions of dollars?????????????????????

10 years ago we screamed about the bridge to nowhere costing 200 million. Now we say if its a billion its no big deal.

And that is EXACTLY how we got to where we are now.

[HaveFaith]

Also, you know that medicare and social security have NO affect on our current budget issues, right?

This is not 100% true.

In the past we were able to "borrow" money that came in to SS and Medicare to cover other general operating costs. (I know kind of a shell game)

Now that we have reached the point where those programs are no longer running their annual surplus (as some would say the pyramid has turned upside down) those funds that we used to borrow with a wink wink nod nod aren't there anymore. The old trust fund we used to love to tap into and give them IOU's doesn't spring forth with cash like it once did.

We have no actuary that will say that Social Security or Medicare will ever get back to running surpluses without a major overhaul (cut benefits, raise costs [taxes], or both)

The "Robin Hood Tax" is essentially "take from those who have for no other reason than because they have"

Although it has never worked anywhere else in recorded history maybe we will be the first nation to successfully tax ourselves into prosperity:shot:

[PeterMP]

The biggest argument for these types of taxes is that it encourages long term investing and discourages short term trading based on slight changes in the market, especially high speed trading. It discourages short term profit taking over long term planning, investment, and growth. This type of trading does very little to actually grow the economy. The people that do this type of trading so would end up with lot's transications and therefore a lot of tax, which would discourage their actions.

Large brokerage firms like to do things like figure out when the large pension plans are going to buy or sell stock, and then trade in the opposite manner. The net result is that they make money on the action of the pension plans at the expense of the pension plans. They essentially can trade ahead of the pension planes (at least ahead of a lot of the sales/purchases of the pension plans), make money, and then get out.

Taxing transactions would discourage that type of trading to the benefit of long term stock holders (e.g. people saving for retirement). That you'd get money that might help with the debt would just be bounus.

[TheGoodBits]

The biggest argument for these types of taxes is that it encourages long term investing and discourages short term trading based on slight changes in the market, especially high speed trading. It discourages short term profit taking over long term planning, investment, and growth. This type of trading does very little to actually grow the economy. The people that do this type of trading so would end up with lot's transications and therefore a lot of tax, which would discourage their actions.

Large brokerage firms like to do things like figure out when the large pension plans are going to buy or sell stock, and then trade in the opposite manner. The net result is that they make money on the action of the pension plans at the expense of the pension plans. They essentially can trade ahead of the pension planes (at least ahead of a lot of the sales/purchases of the pension plans), make money, and then get out.

Taxing transactions would discourage that type of trading to the benefit of long term stock holders (e.g. people saving for retirement). That you'd get money that might help with the debt would just be bounus.

100% agree with this. Too much of Wall Street has evolved to playing poker with stocks (or craps) rather than focusing on making worthwhile long term investments. The effect (I believe) is an economy that is more volatile and prone to bubbles and bursts.

[Larry]

This is not 100% true.

In the past we were able to "borrow" money that came in to SS and Medicare to cover other general operating costs. (I know kind of a shell game)

Now that we have reached the point where those programs are no longer running their annual surplus (as some would say the pyramid has turned upside down) those funds that we used to borrow with a wink wink nod nod aren't there anymore. The old trust fund we used to love to tap into and give them IOU's doesn't spring forth with cash like it once did.

We have no actuary that will say that Social Security or Medicare will ever get back to running surpluses without a major overhaul (cut benefits, raise costs [taxes], or both)

The "Robin Hood Tax" is essentially "take from those who have for no other reason than because they have"

Although it has never worked anywhere else in recorded history maybe we will be the first nation to successfully tax ourselves into prosperity:shot:

Wow. How many untruths in that post.

Let me count the ways.

1) The are no quotes around "borrow". Those funds were quite literally borrowed. Not "borrowed".

2) No, those funds weren't "borrow[ed] with a wink wink nod nod", They were borrowed with the issuance of US Treasury Bills: The most reliable, best-backed security in the entire world. (And the only obligation the US Government has, which the US Constitution specifically states that they must honor. The Constitution does not say that the government has to pay our soldiers. It does say that we must repay T-bills.) Not "IOU's". Not "wink wink nod nod". A Constitutionally-mandated debt.

3) "The "Robin Hood Tax" is essentially "take from those who have for no other reason than because they have"". Well, that's what lots of people who are opposed to all taxes (on rich people. Taxes on poor people, they don;t have problems with.) claim.

You got any support for that claim, other than "lots of politicians claim it"?

4) "Although it has never worked anywhere else in recorded history maybe we will be the first nation to successfully tax ourselves into prosperity"

Funny, I haven't seen anybody suggest that we can "tax ourselves to prosperity".

However, I do observe that our situation for the last decade has been one of the lowest tax revenues since WW2. And I suspect that our nation was a lot more prosperous in the 50's, 60's, and 70's, than it is now.

It would appear, from history, that we have proven that you can't "tax cut to prosperity". (And that you certainly can't "tax cut to a smaller deficit".

---------- Post added January-16th-2013 at 10:34 AM ----------

The biggest argument for these types of taxes is that it encourages long term investing and discourages short term trading based on slight changes in the market, especially high speed trading. It discourages short term profit taking over long term planning, investment, and growth. This type of trading does very little to actually grow the economy. The people that do this type of trading so would end up with lot's transications and therefore a lot of tax, which would discourage their actions.

Large brokerage firms like to do things like figure out when the large pension plans are going to buy or sell stock, and then trade in the opposite manner. The net result is that they make money on the action of the pension plans at the expense of the pension plans. They essentially can trade ahead of the pension planes (at least ahead of a lot of the sales/purchases of the pension plans), make money, and then get out.

Taxing transactions would discourage that type of trading to the benefit of long term stock holders (e.g. people saving for retirement). That you'd get money that might help with the debt would just be bounus.

Yeah, I wondered if that was what this was really about. A way to use the tax code to discourage people from trading stock several times a second.

(I remember reading some claim that for the last decade or so, the average length of time that the average share of stock is held, before being traded, was 19 seconds)

Maybe something like this would not only tax the Dallas out of people trying to make one-minute profits, but might make market manipulation a lot harder?

[elkabong82]

Not confusing anything, what you are proposing is your wife saying hey we owe a trillion dollars in this years credit card debt and you are saying I can save you a million.

It's not solving anything.

What you are suggesting, though, is that you don't find any ways to take the debt down unless it is a significant chunk. Any measures that are reasonable and can knock off chunks of debt are good. COLLECTIVELY they can mean something, and it's the same method normal households use to cut down costs. There is no magical singular solution that will cut down most of the debt; there has to be a bunch of trimmings that add up. Instead of shooting down solution after solution because "it's not enough" and letting the current problem worsen (and it's the same argument I see from many right wingers any time a tax is proposed), a bunch of small solutions should be derived and implemented so that they add up to significant debt reduction.

[Thiebear]

chipwich: start packing lunches and making dinner, the bigger things will suddenly come along.

Same with every branch, division of the government. Treat the money as if it was real.

[Larry]

chipwich: start packing lunches and making dinner, the bigger things will suddenly come along.

Same with every branch, division of the government. Treat the money as if it was real.

I think it was Adlai Stevenson who said that the problem with Washington was that you get in these conversations where you're spending $100 million here, and $300 million over there, and $500 million someplace else, and before you know it, it adds up to real money.

[HaveFaith]

Wow. How many untruths in that post.

Let me count the ways.

Larry, I think you read way more into what I wrote than I meant to put. I was replying to someone stating that SS and Medicare had "Nothing" to do with the current situation and pointing out that they do in an indirect way.

You are correct that I used some "pointed language" that suggested that SS and Medicare IOUs were bad (not soundly invested in T-Bills). The "wink wink nod nod" wasnt about the SS and Medicare funding in particular, but more about the thought that it would always be there to divert to other purposes.

You mention that you cannot tax cut your way out of a deficit. My only conflict with that is that you cannot cut your way out of a deficit in terms of cutting dollars, but their have been times where tax rate cuts have spurred greater taxable activity in such a way as to increase the tax revenues. Not suggesting that I have the answer as to what is the optimal tax rate but when you go to either extreme (raising too much or lowering too much) you influence activity that will (at some point on the curve) decrease tax revenue.

As an aside, I really enjoy the perspective that PeterMP brings to debates such as this. Thank you

[Larry]

Larry, I think you read way more into what I wrote than I meant to put. I was replying to someone stating that SS and Medicare had "Nothing" to do with the current situation and pointing out that they do in an indirect way.

And he was 100% correct, about SS. (Not about Medicare, as I understand it.)

SS contributes absolutely zero to our current debt, and deficit.

You mention that you cannot tax cut your way out of a deficit. My only conflict with that is that you cannot cut your way out of a deficit in terms of cutting dollars, but their have been times where tax rate cuts have spurred greater taxable activity in such a way as to increase the tax revenues.

Look at that chart I posted, again.

There have been two recent major tax cuts: Reagan, in 81-83, and W, in 01.

Look at the chart. What happened to revenues, when those taxes were cut?

(I'll give you a hint: They went down. Hugely.)

This "tax cuts lead to bigger revenues is a lie that's been told for decades.

The true statement is actually "throughout history, US federal revenues have gone up, almost every year. And, every time the Republicans have cut taxes, revenues have plunged, deficits have exploded, but, if you wait long enough, then eventually there will come a time where revenues go up. (Just like they do, 9 years out of 10, anyway.)"

[HeluCopter29]

Yeah it's already paid for right You might want to dig a little deeper.

I think you really don't understand how SS works. It has a 2 trillion dollar surplus and has never actually added anything to our deficit.