Tuesday, August 23, 2011

Put a Sales Tax on Wall Street Transactions

Just read a NYT's  article by Nancy Folbre, an economist, and professor at U. Mass. - Amherst.  One of the reasons that have been given for the disrepancy between sales and "investment" taxes is that investment supposedly builds our future while sales tax is all about the present, material and implicitly is irrelevant to building the future.  Bull Pucky. 
Most of us pay state and local sales taxes on most things we buy, and most casino gambling is subject to state taxes ranging from up to 6.75 percent in Nevada to 55 percent on slot machines in Pennsylvania.

But speculative purchases of stocks, bonds and other financial instruments in the United States go untaxed but for a tiny fee (less than a half-cent) on stock trades that helps finance the Securities and Exchange Commission.
Sales taxes on goods support new technologies that will not get off the ground if no one buys them. Want to talk about risk?  Invest in a home that is worth less than the mortgage on it.  Parents buying school supplies for their kids invests in the future of labor and research.  Homes are no different than "plants" in industry, especially in an information age where much "real" work occurs at home over privately paid for communication lines.  The value of the bulk of investment by the American people has been inappropriately skewed for far too long. 

Folbre's article is a must read. It clearly explains the logic of an argument that has been avoided  or overlooked for far too long.  If the repugnants won't allow themselves to be taxed, let us just put a sales tax on investments.  All sales taxes ultimately tax investments by the people.  

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