Is Your Presidential Candidate Owned by Wall Street? (by Dean Baker for Truthout)

[marmar]

Is Your Presidential Candidate Owned by Wall Street?
By Dean Baker
T r u t h o u t | Columnist

Monday 11 June 2007

That's a reasonable question, given how much money the Wall Street gang is coughing up this year in campaign contributions. Fortunately, there is a quick and easy test that you can administer to your favorite candidate to determine the answer.

Just call or email your favorite presidential candidate, and ask their staff whether he or she supports a securities transactions tax (STET). You will probably have to explain to the candidate's staffer what a STET is. You can tell them that a STET is a small tax placed on a trade of a share of stock or other financial asset (e.g. bonds, options, futures, etc.).

The tax would typically be set at a very low level so that it would have almost no impact on anyone who is not trading stocks on a daily basis. A rate of 0.50 percent on a stock trade would be reasonable; this is the tax rate that the United Kingdom currently imposes on trades on the London Exchange. However, even a small STET can raise vast amounts of revenue because of the enormous volume of trading in financial markets. In Japan, a system of STETs raised an amount equal to four percent of the country's tax revenue, the equivalent of $120 billion a year in the United States, at present. This would be almost enough money to eliminate the deficit, and more than enough to extend health insurance coverage to the uninsured under some proposals.

While no one ever likes to pay more money in taxes, the great thing about a STET is that it would have almost no impact on anyone who is not wealthy or actively speculating on stocks. While close to half the country owns some stock at present, a STET would be almost invisible to anyone who buys and holds shares to save for their retirement or their kids' education. A worker buying $10,000 of stock would pay an additional $25 because of a 0.25 percent STET. They would pay the same fee on the sale.

Even with this tax, most stockholders would still pay far less for their stock trades than they did 15 or 20 years ago. The reason is that brokerage fees and commissions have plummeted due to the advances in computers. At the beginning of the 80s, these fees averaged well over one percent of the purchase price. Now, even small investors may pay fees that are less than 0.50 percent of the share price. A modest STET will push the fees part of the way back to their early-80s' level, but no one claimed that high transactions costs were strangling financial markets 25 years ago. ......(more)

The complete piece is at: http://www.truthout.org/docs_2006/061107H.shtml

[eridani]

1. Anybody know what actual candidate positions might be on this? n/t