Economist
Co-Director, Center for Economic and Policy Research
The continuing instability in the world economy is at least partly due to the fact that financial markets are still out of control. Wall Street traders are reaping billions on short term speculation, while our economy remains stagnant. As an economist, I know that building a strong, sustainable economy depends on doing something about a bloated and unruly financial sector.
To help get markets back under control, one important policy tool is a targeted tax on Wall Street trading.1 Please join me in signing this petition to keep pressure on Congress to pass such a tax. First, the Wall Street Tax would raise much-needed tax revenue2 without raising taxes on workers at all. Ten-year estimates range from $400 billion (the Harkin-DeFazio bill introduced last month) to $1.3 trillion in new tax revenue. That revenue can be used to grow our economy and create jobs.
Second, like a vice tax on cigarettes or gambling, the Wall Street Tax discourages activity that is unhealthy for our financial markets. Traders make billions on speculation that leads to quick rises and steep drops in the market that have little to do with how well the economy is doing. This can lead to huge bubbles in oil prices3, or it can send stock prices plummeting based on a computer glitch. With a tax, we discourage that sort of short-term trading.
Finally, the tax would make financial markets more efficient by helping businesses raise capital without all of the inefficiencies that come from an oversized financial sector. The multi-million dollar bonuses of Wall Street executives are a direct drain on the rest of the economy. The money that is currently wasted in the financial sector could instead be used to help businesses grow and create jobs.
Wall Street is putting up enormous opposition to this tax, because it would change the way Wall Street does business, forcing it to serve the productive economy by lending to businesses, homeowners, and students, rather than playing games with complex financial instruments.
Will you sign the petition to Congress?
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