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financial transaction tax

  #22 (permalink)

Chicago, IL
 
 
Posts: 50 since May 2018
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srgtroy View Post
Wall Street will fight it tooth and nail. They told Hillary in 2016 that she would lose their support if she backed the FTT so she dropped it. An FTT that only applied to retail traders wouldn't bring in a dime of revenue.

Possibly, but banks and hedge funds can simply buy/sell otc total return swaps if worse comes to worst with which they would pay 0% FTT given how these artificial instruments are structured. And this is just 1 example. Finding ways around the law is their specialty, especially with the army of lawyers from Cravath, Wachtell, Sullivan Cromwell, DPW, Skadden that specialize in these things.

It's more likely they wouldn't even need to find loopholes since the final bill itself would have to include exemptions for banks/funds, as mentioned before. No politician, not even AOC, would want to create a situation in which markets are extremely illiquid with wide spreads, causing chaos in the portfolios and pensions of everyday Americans due to the volatility. The #1 issue for any politician is always going to be the economy. Because if the economy is doing well, politicians can honestly get away with a lot of shit b/c the general populace really don't give too much of a shit about reigning in their representatives as long as they're getting paid, fed, and their desires satiated.

And even if, like you said, this would lead to no revenue being brought in, I'm pretty sure Democrat politicians like AOC care more about just getting it passed, b/c it demonstrates to the public that they're "for the people, against the rich." It's more about optics than nuance.

When's the last time you saw politicians pass a nice-sounding bill with all the populist bells and whistles and when the bill didn't turn out the way it should have, they admitted their mistake and voted to overturn it? (hint: never i.e. *bamacare)

Bills are hard to pass but once they do, it's even harder to overturn them. Politics 101 is basically to never apologize and admit past mistakes, especially in this day and age of doubling down. This goes for both sides, but esp the Republican side.

This trend of increasing populism is partially the wealthy's fault. One cannot deny that the ridiculously increasing wealth gap in the US and globally has been due to the top 0.01%'s greed squeezing out the middle class. Can you really blame the average folks making 30-50k a year for believing in the premises of this bill and supporting it? The top 0.01% continue to bite the hand that feeds them and people are losing hope and think erroneous platforms like Bernie/AOC are proposing are the real solution.

Personally, the best solution would be to enact a high estate tax. FTT and too high capital gains tax hurt capitalism and the economy (and us retail folks). 70% highest bracket tax on personal income is just pure stupidity since almost no one making that much earns it from personal income.

A high estate tax for high income brackets means the gov't isn't going to tax-rape you while you're alive so you still get to enjoy all the QoL that comes from successfull capitalism. You will still be able to pass along millions to your children, instead of billions. I am not a major fan of generational wealth, as it only exacerbates wealth gaps in society.

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