As Top Democrats Embrace a Robin Hood Tax, It’s Time for Activists to Go Big [View all]

http://www.thenation.com/blog/194673/top-democrats-embrace-robin-hood-tax-its-time-activists-go-big

With backing from House minority leader Nancy Pelosi, D-California, Maryland Congressman Chris Van Hollen moved Monday to present an “action plan” that is designed to frame the Democratic message in the new Congress. At the heart of it is a proposal to address the rapid redistribution of wealth upward in the United States with a small tax on high-volume stock trades and a new initiative to aid working-class individuals and families.

“This is a plan to help tackle the challenge of our times,” declared Van Hollen, a key figure in the House Democratic Caucus and a particularly influential voice in debates on economic policy. “We want a growing economy that works for all Americans, not just the wealthy few.”

The “action plan” calls for a 0.1 percent tax on transactions by high-volume traders—Wall Street’s “high rollers”—that would yield an anticipated $800 billion in fresh revenues over a decade. Reductions in tax breaks for the wealthiest Americans would yield another $400 billion. The combined $1.2 billion windfall would, according to a Washington Post review of the plan, help to fund “a ‘paycheck bonus’ of $1,000 for individuals and $2,000 for married couples, a bonus of $250 for people who save at least $500 a year and reduced ‘marriage penalties’ for couples.”

While the numbers may sound big, what Van Hollen has proposed is a modest plan that only begins to explore the potential of a financial transactions tax. The 0.1 percent tax on trades is far below what unions and activist groups have proposed. For instance, Ellison’s 2013 proposal called for a 0.5 percent tax rate on stock trades, along with a 0.1 percent tax rate on bonds and a 0.005 percent tax rate on derivatives or other investments.

Of course, any proposal for taxing the wealthiest Americans faces daunting odds in a Congress now wholly controlled by Wall Street–aligned Republicans such as Senate majority leader Mitch McConnell, R-Kentucky, House Speaker John Boehner, R-Ohio, and House Ways and Means Committee chair Paul Ryan, R-Wisconsin. Ryan can, in particular, be counted on to use his powerful new position to defend the financial interests that have so generously supported his campaigns.