I recommend a financial transaction tax of .0075% -- .01% on stock or bond transactions in the secondary markets (not for IPOs).
This should automatically begin (turn on like a switch) when the federal government debt-to-GDP ratio is greater than a percentage chosen by Congress (I recommend 40%) and automatically stop when below that level. Therefore, it would not sunset, but it wouldn't brainlessly continue forever.
The revenue from this would be dedicated to paying federal government long-term debt.
It would achieve several goals at once:
- Add some cost to financial transactions, so that real investment and commerce are more attractive by comparison.
- Raise between $750 million and $1 billion per $1 trillion of transactions for the government to pay off long-term debt.
- Make the use of stock buy-backs less appealing and therefore slowly turn off the spigot leading to corporate executives, while leaving the spigot on leading to real investments. This may help repair the long-term problem of the wealth gap.
- Require all who use our markets and who have benefited from our government stability and strength to help solve our indebtedness problem.
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