By LUCY WESTCOTT
WASHINGTON (Nov. 7, 2013)—A proposed financial transaction tax on Wall Street, known as the Robin Hood Tax, would increase revenue and prosperity for Americans, Rep. Donna Edwards told an audience during a briefing at the Robin Hood Tax Campaign’s action conference on Capitol Hill Wednesday.
The financial transaction tax bill, known as the Inclusive Prosperity Bill, was introduced in the House in April by Rep. Keith Ellison, D-Minn. Proponents argue the tax would serve to reign in high-risk and speculative behavior on Wall Street that contributed to the 2008 financial crisis.
The bill aims to apply a sales tax to transactions: 0.5 percent on stocks, 0.1 percent on bonds and 0.005 percent on derivatives. Everyone who bought and sold stocks, bonds or derivatives would be taxed.
To discourage volatile, high-frequency trading, stocks would also be taxed less the longer the owner holds onto them, according to a background document on the financial transaction tax.
The tax could create an estimated $350 billion in revenue, according to the The Robin Hood Tax Campaign. The Campaign, a coalition of health care workers, community and environmental activists, labor organizations and HIV/AIDS activists, held a two-day action conference in Washington this week.
Around 200 members of the campaign, dressed in the red t-shirts and green feathered caps of their fictional namesake, marched in the rain from the Washington Court Hotel on New Jersey Avenue to the Longworth House Office Building Wednesday morning before the briefing. They later visited 96 congressional offices to encourage support for the tax.
“I’ll just say it loudly and clearly, and I know that others will: We really do have to find revenue … We need to find that revenue and share it so that all Americans have prosperity,” said Edwards, D-Fort Washington.
Edwards recalled her parents during her speech, both of whom worked multiple jobs in order to pass on a part of the American Dream to the congresswoman and her siblings. The prospect of sharing in the American Dream today, Edwards said, is more limited than in previous generations.
In addition to raising revenue from the tax, which could provide relief from austerity programs, student debt, unemployment and foreclosure, Robin Hood Tax Campaign proponents also see the tax helping to control the size of Wall Street.
“It will help to stabilize the financial system,” Jeffrey Sachs, adviser to United Nations Secretary General Ban Ki-moon and professor of sustainable development at Columbia University, told the audience during the briefing.
“(The tax) has gone through all the analysis, all the criticism… it’s time for the U.S. to get it’s act together,” Sachs said. “We should make sure that the Congressional Budget Office does a proper scoring of this, shows it will raise revenues. It’s a legitimate, decent, fair tax. Let’s get it formalized.”
The Campaign also hopes that through investment of tax revenue in education, health care and infrastructure, millions of jobs can be created.
A group of Washington-based nurses who planned to spend the day lobbying Maryland representatives and senators are hoping that some of the money raised by the tax would be earmarked for health care.
“It’s not the first time we’ve gone to visit them. We’re going again to ask for their support. We’re going to keep going until we get some response,” said Brenda King, a retired nurse of 41 years.
King, along with fellow nurses Sandra Falwell, LaKisha Little and Joan Greaves, had plans to visit the offices of Reps. Elijah Cummings, John Delaney and John Sarbanes, and Sens. Barbara Mikulski and Ben Cardin. The women are Maryland voters.
“We just keep coming and this is what we do,” said Falwell, who has been a nurse for 42 years. “We’re going to see if we can get them off the fence.”
But not everyone is convinced the numbers add up.
Sam Bowman, research director at the London-based Adam Smith Institute, a free-market think tank, calls the $350 billion figure put forward by the Robin Hood Tax Campaign “bogus,” and does not support a financial transaction tax.
“It ends up freezing markets and makes them more volatile,” Bowman said.
The tax is a particular problem for high-frequency trading markets, which make an enormous number of transactions that will each be taxed, Bowman said. Implementation of the tax could therefore lead to traders making much larger trades at a lower frequency, so they are not taxed as often, which could possibly make the markets become erratic.
Edwards spoke alongside Reps. Judy Chu, D-Calif., Barbara Lee, D-Calif., John Conyers, Jr., D-Mich., and Ellison.