Whatever you want to call it — “fiscal cliff,” “fiscal slope” or “fiscal obstacle course” — if Congress and President Barack Obama don’t act, automatic tax increases and spending cuts will begin to kick in on January 1, 2013. And if they permanently fail to act, the economy could be thrown back into recession.
The automatic, across-the-board “sequestration” cuts totaling $1.2 trillion over 10 years would be particularly devastating (PDF), affecting vital services, including education, food safety, disaster relief and law enforcement.
But we don’t have to go down that road. We don’t have to fall victim to lawmakers who are willing to impose crippling austerity measures on the nation.
One simple solution can significantly help fill the budget gap: a financial speculation tax.
The Wall Street Trading and Speculators Tax Act (S. 1787, H.R. 3313), introduced by Sen. Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-OR), would impose a 0.03 percent fee (three pennies on $100) on the transfer of stocks, bonds and derivatives.
According to the nonpartisan Joint Committee on Taxation, this bill would generate more than $350 billion in revenues over the next ten years. Alone, that amount would fill 30 percent of the “sequestration” gap.