{"id":177841,"date":"2019-05-26T18:22:00","date_gmt":"2019-05-26T23:22:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2019\/05\/26\/mission-fing-accomplished\/"},"modified":"2019-05-26T18:22:00","modified_gmt":"2019-05-26T23:22:00","slug":"mission-fing-accomplished","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2019\/05\/26\/mission-fing-accomplished\/","title":{"rendered":"Mission F%$#ing Accomplished"},"content":{"rendered":"
<\/a>I wholehearted the proposal by Bernie Sanders and Barbara Lee to  levy a tax on financial transactions<\/a>. <\/div>\n

The idea is that by increasing the cost of high frequency trading and other forms of speculation, these parasitic activities would be reduced:<\/p>\n

This week Senator Bernie Sanders and Representative Barbara Lee are introducing bills in the Senate and House for a financial transaction tax (FTT). Their proposed tax is similar to, albeit somewhat higher than, the FTT proposed by Senator Brian Schatz earlier this year. The Sanders-Lee proposal would impose a 0.5 percent tax on stock transactions, with lower rates on transfers of other financial assets. Senator Schatz\u2019s bill would impose a 0.1 percent tax on trades of all financial assets. <\/p>\n

At this point, it is not worth highlighting the differences between the bills. Both would raise far more than half a trillion dollars over the next decade, almost entirely at the expense of the financial industry and hedge fund-types. In the case of the Schatz tax, the Congressional Budget Office estimated revenue of almost $80 billion a year, a bit less than 2.0 percent of the budget. The Sanders-Lee tax would likely raise in the neighborhood of $120\u2013$150 billion a year, in the neighborhood of 3.0 percent of the federal budget. <\/p>\n

While the financial industry will make great efforts to convince people that this money is coming out of the middle-class\u2019 401(k)s and workers\u2019 pensions, that\u2019s not likely to be true. This can be seen with some simple arithmetic. <\/p>\n

Take a person with $100,000 with a 401(k). Suppose 20 percent of it turns over each year, meaning that the manager of the account sells $20,000 worth of stock and replaces it with $20,000 worth of different stocks. In this case, if we assume the entire 0.5 percent specified in the Sanders-Lee bill is passed on to investors, then this person will pay $100 a year in tax on their 401(k). <\/p>\n

While no one wants to pay more in taxes, this hardly seems like a horrible burden. After all, the financial industry typically charges fees on 401(k)s in excess of 1.0 percent annually ($1,000 a year, in this case), and often as much as 1.5 percent or even 2.0 percent.<\/span><\/p><\/blockquote>\n

One of the arguments against the tax is that the forecast revenues are overstated, since there will be less speculative activity as a result of the higher costs.<\/p>\n

This a feature, and a highly attractive feature at that, and not a bug, or, as Randall Munroe noted in his xkcd web comic<\/a>, Mission F%$#ing Accomplished.<\/p>\n","protected":false},"excerpt":{"rendered":"

I wholehearted the proposal by Bernie Sanders and Barbara Lee to  levy a tax on financial transactions.  The idea is that by increasing the cost of high frequency trading and other forms of speculation, these parasitic activities would be reduced: This week Senator Bernie Sanders and Representative Barbara Lee are introducing bills in the Senate …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[447,456,449,437],"class_list":["post-177841","post","type-post","status-publish","format-standard","hentry","tag-congress","tag-finance","tag-legislation","tag-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/177841"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=177841"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/177841\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=177841"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=177841"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=177841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}