It would *only* be about a tenth of a percent, so, they claim, most small and medium-sized investors wouldn't really notice it. (Beware when someone says a tax is *only* ...) It would, however, significantly cut into the profits of large firms like Goldman Sachs, the article points out.
“It would have two benefits, raise a lot of revenue and discourage speculative financial activity,” said Thea Lee, policy director at the AFL-CIO.
“The big disadvantage of most taxes is that they discourage some really productive activity,” she said. “This would discourage numerous financial transactions. People flip their assets several times in an hour or a day. They make money but does it really add to the productive base of the United States?”
I cannot believe this! At a time when the economy is in decline (still), this would discourage people from buying stocks. It they don't buy stocks, they don't become investors. If there are no investors, there are no investments. Without investments, there are no capital expenditures or expansions. If businesses don't grow, they fail.
Do 'they' not understand basic economics? Obviously not.
And now the AFL-CIO gets to determine what actions "add to the productive base" of our nation? Incredible! Unsustainable union demands are what contributed to the decline of the automotive industry and the layoffs of thousands - how's that for contributing to the productive base????
The AFL-CIO and some allied Democrats would like to cut down on the overall level of trading, or at least give the U.S. government a piece of the action, which would likely tamp down trading.
There's the point - they want more money for the government, which obviously means more spending on union priorities. Take money away from the citizens in order to spend it on pork projects or in meeting the demands of the union. Of course!
But that's not the only thing. According to the article, liberals are mad at Goldman Sachs:
Democrats and labor officials would also like to take a bite out of Goldman’s profits. Liberals are angry the company, which immersed itself in the frenzy of speculation leading to last year’s financial collapse, is now making huge profits after accepting (and repaying) $10 billion in government aid. Goldman employees are on track to earn an average of more than $700,000 this year.
Now we're getting to the heart of the matter. The company accepted and repaid government aid. As a result, the government can't tell them what to do anymore, since it no longer has the hammer of the bailout to hold over their heads. And now, the employees are going to - wait for it - earn money!!!!
We can't possible have people making huge amounts of money - they must suffer! But how to make them suffer for the sin of earning a lot of money? Tax them in such a way as to discourage their ability to earn.
And this is what is passing for government policy? Whatever happened to government protecting our rights and our liberties and our private property? Whatever happened to being happy that others can make a good living and earn money? How did we get to the point of such class envy that we use government to steal from those who "have" to give to others with the end goal of buying votes and ensuring re-election so the process can continue?
How did we get to the point that we demonize wealth instead of celebrate the accomplishments of the individuals who attain it - and thus are able to fund so many charitable, artistic and philanthropic acts?
AFL-CIO president John Sweeney said, following the election of Barack Obama as president:
"We have taken the first crucial steps to build a better future for our children and grandchildren. And what we've seen – the stunning voter participation and the common call for change – is an indication of the history we can continue to make together.
The election is just step one in delivering the change we need."
The article further states that one of the priorities for the unions is "regulating Wall Street."
So that's what they're trying to do. But in trying to get even with a company they don't like, and raise money to fund their goals of socialized health care, they are supporting a bill that will tax everyone - and will be especially hard on the average investor like many of their union members.
Most individuals have their pensions invested in retirement accounts and mutual funds that make such investments. As individuals age they make changes in their accounts and this bill will tax them every time. But don't worry, it's *only*...
The bigger problem with this idea is that the tax will discourage the overall market. If people are taxed based upon how many times they buy or sell a stock, it will reduce the number transactions, which will have a global impact. If you have the option of purchasing a stock in America or in Japan, but America charges you a tax for each purchase, would you be more likely to invest in the Nikkei, instead? People invest to make money so why would they willingly forgo a portion of their hoped-for profits simply because some union thinks they're more 'entitled' to the earnings than they are?
This needs to be stopped. Not just because it's bad for the nation and bad for Americans (it is!), but because unions (and other special interest groups) should not be able to have the laws written to benefit their own narrow interests (like the bailout of their union health care and mismanaged pensions), especially at the expense of the American tax payer.