Support a Tax on Financial Transactions

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Target: Mary Schapiro, Securities & Exchange Commission Director

Goal: To call for a tax on financial transactions

Since the economic crisis of 2008, the US financial industry has faced rampant criticism. Greater financial regulation has been suggested as a means of curbing its excesses. Many see the explosion of the market for financial instruments such as derivatives and collateralized debt-obligations as a major contributing factor for the housing bubble collapse as well as the subsequent economic crisis. Progressive economists have proposed a tax on financial transactions in order to curb the volume of risky short-term speculation and allow the financial sector to better facilitate long-term productive transactions.

Also known as the Tobin Tax to economists, a financial transaction tax aims to decrease incentives for shortsighted speculation in financial markets through a modest tax (Dean Baker from the Center for Economic Policy Research suggests a tax as small as 0.01% on every transaction would bring in over $50 billion annually).

European politicians including France’s socialist Prime Minister François Hollande and Germany’s conservative Chancellor Angela Merkel, have endorsed the tax, and it has also gained support amongst American groups including the National Organization of Women and National Nurses United.

The American financial industry vigorously opposes a tax on financial activity because it would reign in their ability to make exorbitant profits off of risky transactions. Wall Street and its associates continue to claim the tax cannot be enforced. The UK, which has implemented a tax on stock trades, seems to refute this notion. Even financial insiders implicated in the economic crisis, such as Clinton-era Treasury Secretary and former director of the U.S. National Economic Council, Larry Summers, have supported a financial transaction tax in some form or another.

By signing the petition below and urge the Securities & Exchange Commission to support and implement a financial transaction tax. This will curb complicated and risky speculation, will provide a progressive means of raising government revenue, and will provide an incentive against activity that brought on the current economic crisis.

PETITION LETTER:

Dear Mary Schapiro,

In the wake of the U.S. economic crisis, there is presently nothing in place that adequately discourages the kind of risky short-term investments that allowed the housing bubble to exacerbate. While the UK and European nations have either implemented or have come out to support a financial transactions tax, the U.S. remains uncommitted to such a change. This is in spite of the many economists, including former Treasury Secretary Larry Summers, who have voiced support for the tax.

As director of the SEC, it is your task to ensure financial activity in the US is regulated appropriately. Speculators should have to face some cost for profitable short-sighted investments. A modest financial transactions tax, even one as small as 0.01% of every transaction, would bring in well over $50 billion in  annual revenue.

A tax on financial speculation would ensure discipline in Wall Street activity while providing an ample source of revenue for the federal government. Please use your power as SEC director to support a financial transactions tax.

Sincerely,

[Your Name Here]

Photo Credit: Stuck in Customs via Flikr

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57 Signatures

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