Thursday, January 28, 2016

Has the time for a tax on financial trading arrived?

The New York Times editorial board takes a stand today on the assertion that a trade charge on the buying and selling of stocks, bonds and derivatives is warranted.

The next president, in order to achieve progress on this issue, will have to be one that is willing to take on Wall Street.

Bernie Sanders has campaigned on engaging the investor class on terms such as this -- and has attempted to portray Hillary Clinton as too ensconced in Wall Street culture to be a reliable champion for Main Street.

Clinton, of course, would take exception to this characterization.

Donald Trump, unlike his Republican rivals, has spoken out -- perhaps surprisingly -- about the lack of fairness in the tax code regarding investor-class elites.

From the editorial:
"Critics ... contend that a financial transaction tax would have damaging effects on trade volume, volatility and the ability of markets to determine asset prices. That is debatable, and setting the tax rate low at first, and raising it gradually, would help avoid potential damage. But the possibility of unintended consequences is not the real obstacle to a broad and prudent financial transaction tax. It is that a majority of lawmakers are not willing to challenge Wall Street’s power."

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