If you’re like me, you’d be pretty pleased about never again hearing the phrases “fiscal cliff” or “debt crisis.”
But Congress – that venerable institution that now receives lower approval ratings than cockroaches and colonoscopies – is about to disappoint us once again.
In the next few months, we can look forward to Congress and the White House arguing back and forth about sequestration cuts, raising the debt ceiling and passing a budget. Austerity extremists, meanwhile, want to put Medicare and Social Security on the chopping block.
Sequestration cuts, you may ask? Weren’t those already dealt with?
In the “fiscal cliff” bill, Congress and President Obama simply punted on the automatic, across-the-board cuts totaling $1.2 trillion that were scheduled to begin taking effect on January 1.
Now, they are set to begin on March 1.
What a reprieve!
Despite this absurd back and forth, there is some good news. Washington’s ongoing struggle over our fiscal future gives lawmakers another chance to just maybe get it right by instituting a tax on Wall Street’s reckless financial speculation.
The financial speculation tax bill that Sen. Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-Ore.) introduced in the 112th Congress calls for a 0.03 percent tax on transfers of stocks, bonds and derivatives. That’s 3 pennies per $100 of trade value. Even at that tiny rate, the bill would generate more than $350 billion over the coming decade, according to the non-partisan Joint Committee on Taxation.
That $350 billion would fill roughly 30 percent of the sequestration gap, and thus substantially decrease the amount of anticipated cuts to vital services, including education, food safety, disaster relief and law enforcement.
Don’t be duped by deficit scolds who would bully our nation into another so-called “debt crisis” or off of a “fiscal cliff.”
Enough money exists so that we don’t need to go down the road toward austerity, we just need to look for it in the proper place. How about starting with the woefully under-taxed financial sector, which currently generates about 30 percent of the nation’s total corporate profits, but contributes only about 18 percent of total corporate taxes.
Insist that Congress take seriously the smart, progressive tax policy that points the way out of these near-sighted debates: the financial speculation tax.
To urge your members of Congress to support the financial speculation tax, visit citizen.org/financial-speculation-tax-action.
Micah Hauptman is Public Citizen’s financial policy counsel. Follow him on Twitter at @Micah_Citizen.