Some in Washington DC are now looking at imposing a sales tax of some sort on all financial transactions. As if the corporate tax, capital gains tax, death tax, payroll tax, personal income tax, fees, fines, regulatory burdens and impressive web of exemptions, deductions and “special circumstances” already in the tax code weren’t enough. . . politicians are now getting creative about slowing down the economy. This so-called “Robin Hood” tax (more on that in a minute) would impose a tax on each financial transaction conducted on Wall Street. And some people on Capitol Hill think this might be a great way to make those evil 1 percenters chip in.
Speaking to Bloomberg news, Eleanor Holmes Norton, from Washington DC, said the tax would serve as a protection against any major sell off in the market, and would help impose“fairness” upon Wall Street by making sure they “had a part in paying down our Debt.” She added in - for the sake of class warfare - that the “only part of the economy” it would hurt would be “the one part of the economy that is humming along just fine.” In her effort to sell the tax, she even mentioned that Great Britain already has something similar in place. . . Um. . . Didn’t we, at one point, dislike Great Britain as a role model for taxation?
If you can, take a minute to hear what she has to say in her own words:
It’s true that Wall Street seems to be doing well. (This, of course, puts them in the cross hairs of the Democrats.) But the markets are up, mostly because of the unprecedented amount of liquidity being pumped from the Federal Reserve. And who is Wall Street? Is a slab of pavement and 18th century bricks going to pay this tax? Or is it going to be you and me, and anyone else who has a mutual fund, IRA, savings plan or day trade? This tax will be paid by individuals, companies (which are groups of individuals working under a common cause and name for tax purposes), and retirees.
She goes on to insist that the tax will be so small, there will be no volume lost in the market. Any such promise, however, should be met with great skepticism. Just remember: When the income tax was first introduced, after the passage of the 16th Amendment, the top marginal rate was just 7 percent. Within a mere 5 years the top marginal rate skyrocketed to 77 percent. The average American saw their taxes rise from 1 percent, to roughly 30 percent. But she expects us to believe this new “Robin Hood” tax will be different. For some reason, this time, the government will keep their word and keep the tax low.
She does, however, assert that the tax will be large enough to reduce volatility in the market. Miraculous, isn’t it, how a bunch of politicians can pinpoint the exact amount that will dissuade “unnecessary” trades while not dissuading market participation in the first place?
As for Fairness? Anyone making a profit already has to pay a capital gains tax. The corporations that are being invested in already pay corporate income taxes on all their profits. It seems to me, the collection of businesses, individuals, and investors involved with Wall Street already pay “their fair share.” Every dollar made, and lost, in the market has been taxed many times before, and will be taxed many times again. (And, let’s be honest, Democrats have no real intention of “paying down the debt” regardless of how much tax revenue they get. Even with record tax revenue last year, the Federal government ran over a trillion dollars in the red.)
But, strangely, the part that really irritated me was the nickname for the tax. . . The “Robin Hood” tax. While I might be several years displaced from my childhood, I remember the story of Robin Hood fairly well. Wasn’t he the guy that had his land taken by the evil Prince John? Didn’t he then band together a group of men who had also been wronged by the crown? Isn’t that the guy?
Who was Robin Hood fighting? The tax collectors! Robin Hood was a tale of one man (one wealthy man, I might add) that fought against an increasingly corrupt dictator. In fact, Robin and his “merry men” were fighting against a government that routinely disregarded their right to private property and wealth. The land was overrun by corrupt Lords, and being pillaged by a greedy Prince. Robin stole from the Government, and stole from Prince John’s Treasury, in order to return to the people what had been rightfully theirs. (According to the Kevin Costner movie, the area was also overrun with the horrible fashion of mullets. Poor people. They had apparently not yet invented mirrors.)
In other words: Robin Hood was the first anti-tax crusader. He was a man that respected personal accumulation of wealth without interference from the government. He was a man who despised political corruption. He was a man who saw a people being destroyed by burdensome taxation, and arbitrary prosecutorial powers. In other words: If he were alive today, he would be Grover Norquist’s best friend.