Retro’s back. So, here’s a real “oldie-but-goodie”: taxing Wall Street trades.

Critics of reinstituting the tax argue that the tax is unconventional, but it’s as classic as Bach. Britain’s tax on the sales of stocks is an element of a stamp duty that’s been in place since the late 1600’s.

In the United States, it was in place more like from ragtime to the Beatles. 1914 through 1965, the U.S. had a modest Wall Street tax, also known as a financial transaction tax ‒ ranging from 0.02 to 0.06 percent ‒ in place. And if we count the minuscule fee on U.S. stock trades currently funds operations of the Securities and Exchange Commission (SEC), you could say a similar tax has been in place up to and including the Taylor Swift era.

As detailed in the new report from Public Citizen’s Congress Watch division, “Financial Transaction Tax: An Old Solution to a New Problem,” the mid-20th century Wall Street tax was shelved as part of a sweeping overhaul of excise taxes, not because of market issues, as some critics claim,. The record shows that the tax generated steady revenue during a time of significant growth in the American economy without harm to the market. In fact, the economy grew at 5 percent annually from 1959 until 1965, the period in which the legacy Wall Street tax most closely resembled modest current day proposals.

So what has the American public been missing out on in the past half-century since the government changed its tune and pushed pause on the policy? The report shows that if the tax on transfers of stocks had not been repealed and sales volume had remained the same, the tax could have generated nearly $400 billion (in today’s dollars) for the half century spanning 1966 to 2014. Of that, $333 billion would have accrued since 2000 — an average of more than $22 billion a year in revenue for the past 15 years.

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lisa-gilbert-pcStatement of Lisa Gilbert, Director, Public Citizen’s Congress Watch Division

Note: Today, the U.S. Consumer Financial Protection Bureau (CFPB) is announcing recommendations to address forced arbitration clauses in consumer financial contracts. The agency suggests eliminating class-action bans from contracts but proposes only to gather information about forced arbitration clauses that apply to individual consumers.

Today’s announcement puts consumers one step closer to holding corporations accountable for wrongdoing. But the Consumer Financial Protection Bureau missed an opportunity to more fully protect people from unscrupulous companies that block their customers from going to court.

Here’s what’s great about the announcement: The agency proposes to eliminate class-actions bans from consumer contracts. These clauses prevent wronged consumers – typically those who have been cheated out of small amounts of money – from banding together to take a corporation to court as a group. Often, this is the only means people have to recoup their losses. Class actions also prod companies to reform unsavory business practices.

Here’s what’s disappointing: The agency is not proposing to ban forced arbitration clauses – dangerous clauses buried in the fine print of contracts that take away our right to go to court if harmed by corporate bad actors. Consumers encounter these clauses when signing a contract of employment, buying a cell phone or receiving a loan for a new car—and the take-it-or-leave-it terms give them no choice but to sign away their rights. In an arbitration proceeding, there is no publicly accountable judge or jury, and there is no right to an appeal. The arbitrators do not have to follow the facts or the law, and there is no public review of decisions to ensure the arbitrators got it right.

Rather than eliminate these pernicious clauses, the agency proposes gathering information about them. But the CFPB has all the data it needs. For several years, it studied arbitration clauses and the harm they cause consumers. The agency found that tens of millions of consumers are restricted by arbitration clauses. It confirmed that the main impact of forced arbitration is to stop most injured consumers from getting any relief at all.

We urge the agency to look at the data it has and act now to protect consumers from forced arbitration.

"Allison Fisher" "Public Citizen"Statement of Allison Fisher, Outreach Director, Public Citizen’s Energy Program

Listen to a telephone press conference held by opponents of the takeover.

Mayor Muriel Bowser was wrong to claim that a D.C. government settlement with Exelon in its bid to take over Pepco will put D.C. and its residents first. It does not.

Allowing Exelon to keep its failed deal alive after the D.C. Public Service Commission rejected it puts corporate profits ahead of the public interest.

The mayor is touting this settlement as a remedy to the proposal that the PSC rejected for failing to be in the public interest. It is not a remedy. The new settlement terms are only modest, superficial changes that fall far short of the PSC’s mandate that the merger serve the public interest.

The small changes fail to effectively counter the acquisition’s fatal flaw: Exelon’s business model and practices are at odds with Pepco’s ability to serve D.C.’s consumers. Exelon’s business model – which seeks to balance losses experienced in its wholesale power plant division with Pepco’s guaranteed revenue – is in conflict with the best interests of Pepco customers and is misaligned with the District’s clean energy goals. Commitments to address that conflict of interest are inadequate.

An increase in a community investment fund negotiated by the D.C. government to offset increased rates and risks expected from the merger amounts to little more than a fraction of the windfall Pepco shareholders would see if this deal goes through.

This is not a win for D.C. residents. The true victory for the District came in August when, after more than a year of public process and deliberation, the PSC unanimously voted to reject Exelon’s proposed takeover of Pepco. This settlement betrays that process, does little to mitigate the inherent problems the takeover poses to ratepayers and the District’s clean energy future, and, if approved, will serve as D.C.’s first taste of how Exelon wields its money and influence to get what it wants.

Public Citizen is calling on the PSC to treat the settlement as a new application, allowing the public full scrutiny and review of the deal, and to reject an attempt by the settling parties to expedite the process.

peter-maybarduk-public-citizenStatement of Peter Maybarduk, Director, Public Citizen’s Access to Medicines Program

The deal brokered today by the U.S. Trade Representative (USTR) and the Australian government on biotech drugs, which supposedly paved the way for an overall “deal in principle” for the Trans-Pacific Partnership (TPP), fell short of Big Pharma’s most extreme demands but will contribute to preventable suffering and death. The final deal as reported does not seem to adhere to the “May 10th 2007 Agreement” standard on access to affordable medicines and could complicate any eventual final TPP deal’s prospects in the U.S. Congress. In biologics and other areas, TPP rules would expand monopoly protections for the pharmaceutical industry at the expense of people’s access to affordable medicines. (The May 10th Agreement was brokered in 2007 between Democratic congressional leadership and the Bush administration to begin to reduce the negative consequences of U.S.-negotiated trade agreements, for health, the environment and labor.)

In recent days, monopoly periods for biologics, which are medical products derived from living organisms and include many new and forthcoming cancer treatments, became the most controversial issue in the attempt to conclude a TPP. The highly technical and confusing biologics deal appears to not guarantee Big Pharma the minimum eight-year automatic monopolies that industry has taken for granted as an eventual TPP outcome. According to informed sources, countries could limit automatic biologics exclusivity to not more than five years, at which point affordable biosimilars could enter the market. (Biologics exclusivity is separate from and independent of patent protection, though the protections may overlap.) Yet the deal also includes mechanisms that would help the USTR browbeat countries, now and in the future, to get what Big Pharma wants, and pull countries toward longer monopoly periods.

This week, U.S. Rep. Sander Levin made clear that May 10 agreement limits exclusivity to five years, with a “concurrent period” mechanism to ensure faster access that is not present in the TPP biologics deal. Several other TPP rules, including those relating to patent term extensions, linkage and evergreening, go beyond the limits of the May 10th Agreement. In late July, 11 of the 28 Democrats who voted for Fast Track legislation warned in a letter that the TPP could fail in Congress if it did not adhere to the May 10 standard with respect to access to medicines.

With respect to other issues in the TPP’s Intellectual Property Chapter, the transition periods before developing countries must meet all of the TPP’s protections for pharmaceutical corporations and possible exceptions to those rules are not sufficient to protect access to medicines. Transition periods will be very short and apply to only a few of the most harmful rules. Exceptions will be limited to very few rules or countries. Within a few years, most, if not all, harmful TPP rules will apply to all countries.

Controversies over pharmaceuticals and intellectual property, including frequently unanimous resistance from negotiating countries, have held up the TPP for years. Many courageous negotiators and others from developing countries stood up to industry and USTR pressure, consistently, to protect their people’s health. A number of harmful rules were eliminated from TPP proposals as a result of this work.

Yet the Obama administration showed itself willing to risk its entire trade agenda to satisfy the avarice of the pharmaceutical lobby. In that respect, people everywhere trying to understand why medicine prices are so high find a disheartening answer in the TPP negotiations: The pharmaceutical industry has purchased tremendous influence with political leaders.

LoriWallach_1107Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch

If there really is a Trans-Pacific Partnership (TPP) deal, its fate in the U.S. Congress is highly uncertain given the narrow margin by which trade authority passed this summer, the concessions made to get a deal, and growing congressional and public concerns about the TPP’s threats to jobs, wages, safe food and affordable medicines and more. The intense national battle over trade authority was just a preview of the massive opposition the TPP will face given that Democratic and Republican members of Congress and the public soon will be able to see the specific TPP terms that threaten their interests.

With congressional opposition to TPP growing and the Obama administration basically up against elections cycles in various countries, this ministerial was extended repeatedly because this was the do or die time, but it’s unclear if there really is a deal or this is kabuki theatre intended to create a sense of inevitability so as to insulate the TPP from growing opposition.

Ten U.S. presidential candidates have pushed anti-TPP messages in their campaigning, stoking U.S. voters’ ire about the pact. Democratic candidate Senator Bernie Sanders has repeatedly said that “The TPP must be defeated.” Republican frontrunner Donald Trump also has repeatedly slammed the TPP, stating “It’s a horrible deal for the United States and it should not pass.” The Canadian national election outcome could also rock the TPP talks, as Conservative Prime Minister Harper’s political opponents have taken critical views of his approach to TPP.

If there really is a deal, its fate in Congress is at best uncertain given that since the trade authority vote, the small bloc of Democrats who made the narrow margin of passage have made demands about TPP currency, drug patent and environmental terms that are likely not in the final deal, while the Republican members who switched to supporting Fast Track in the last weeks demand enforceable currency terms, stricter rules of origin for autos, auto parts and apparel, and better dairy access for U.S. producers.

The TPP’s prospects will be even worse if the Administration announces a deal today but then does not actually have a final text to provide Congress. There is intense controversy in many TPP countries about the pacts’ threats to jobs, affordable medicine, safe food and more.
Useful Resources
The Fast Track timeline for a U.S. congressional vote on the TPP: As this memo explains, under the Fast Track bill, various congressional notice and report filing requirements add up to about four and one half months between notice of a final deal and congressional votes being taken. Even if all of the timelines are fudged by the 90-day notice to Congress before signing, a TPP vote cannot occur in 2015.
Congressional Letters Raising Doubts on the TPP’s Prospects: On Sept. 25, 160 House Republican and Democrats sent a letter to Obama demanding enforceable currency disciplines in the TPP. While building that level of support required months when a similar letter was sent in 2013, this letter was in circulation for only a week, starting when the TPP Atlanta ministerial was announced. Meanwhile, at the end of the summer, 19 pro-Fast Track Democrats sent a letter laying out necessary environmental terms for an acceptable deal, and 18 pro-Fast Track Democrats sent a letter about lack of enforcement in current and future trade agreements and demanding action against Peru for alleged violations of environmental terms in its bilateral U.S. trade deal. Twelve Democrats who supported Fast Track and 12 Republican members were among the 160 representatives signing a letter decrying Malaysia’s inclusion in the TPP and the upgrade of Malaysia’s human trafficking status. During this week’s negotiations, the top Republican and Democrat leaders on trade in the House and Senate sent a letter expressing frustration at the lack of coordination and consultation between USTR and Congress on the remaining issues of the negotiation, and 25 pro-Fast Track Republicans and Democrats from dairy districts sent a letter expressing their concern that a final deal would not meet their goal for improved dairy market access in Canada and Japan.
Polling: As this memo shows, recent polling reveals broad U.S. public opposition to more-of-the-same trade deals among Independents, Republicans and Democrats. While Americans support trade, they do not support an expansion of status quo trade policies, complicating the push for the TPP. Furthermore, recent Pew polls in many of the TPP nations show that, outside Vietnam, the deal does not have strong support.

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