Wednesday, September 19, 2012

Keith Ellison's Inclusive Prosperity Act


Instead of waiting for Obama and Boehner to cobble together some "Grand Bargain" on November 7, Congressional Progressive Caucus co-chair Keith Ellison decided to give them a headstart with some commonsense legislation that just about everyone in the country-- other than hedge-fund managers and Rush Limbaugh-- would probably embrace. This week Ellison introduced H.R. 6411, the Inclusive Prosperity Act, "to impose a tax on certain trading transactions to strengthen our financial security, expand opportunity, and stop shrinking the middle class." So far there are 8 co-sponsors, John Conyers (D-MI), Bob Filner (D-CA), Barbara Lee (D-CA), Jim McGovern (D-MA), Pete Stark (D-CA), Lynn Woolsey (D-CA), Raúl Grijalva (D-AZ) and Jim McDermott (D-WA), all House Members who put the interests of working families above the interests of the corporate campaign donors who make the wheels in DC-- both sides of the aisle-- go round and round.

Ellison, a member of the House Financial Services Committee, points out that the bill, if passed without tampering by lobbyists, will "raise billions to invest in our economy by taxing highly speculative financial transactions." It would tax the sale of stocks, bonds and derivatives sold by Wall Street firms. The tax imposed will be 0.5 percent on stocks, 0.1 percent on bonds, and 0.005 percent on derivatives or other investments.

He explained that “the American public provided hundreds of billions to bailout Wall Street during the global fiscal crisis yet bore the brunt of the crisis with lost jobs and reduced household wealth. This is a phenomenally wealthy nation, yet our tax and regulatory system allowed the financial titans to amass great riches while impoverishing the systems that enable inclusive prosperity. A financial transaction tax protects our financial markets from speculation and provides the revenue needed to invest in the education, health and communities of the American people.” 

The small tax is meant to discourage unsafe speculation and gambling-- rather than real investing-- by Wall Street firms. It would make high frequency trading less profitable, which could reduce the excess speculation on commodities like food and gasoline that has caused their prices to escalate, sometimes irrationally-- and much to the disadvantage of consumers. Almost 30 nations have some form of a financial transaction tax and the U.S. had a similar tax from 1914 until 1966. The UK has had a tax on stock trades for decades-- the same rate proposed in HR 6411-- and their volume of trading has grown robustly. Supporters of a form of financial transactions tax include business leaders such as Microsoft founder Bill Gates, Dallas Mavericks’ owner Mark Cuban, and Berkshire Hathaway chairman and CEO Warren Buffet. Jean Ross, RN, co-president of National Nurses United:
“Congressman Ellison is showing great leadership for our country. HR 6411 is a critical step to generate the revenue for the healing and recovery our Main Street communities across the nation so desperately need. From coast to coast, nurses, health care, environmental, labor, and community activists have come together calling for a tax on financial speculation so that Wall Street will help pay to reverse the damage its reckless behavior caused to our economy. This is a small, common sense tax, already in place and working wonderfully well in dozens of countries across the world.”

As I mentioned, on the first day, Ellison already had 8 co-sponsors. Some of congressional candidates from our Prosperity Economics page contacted me to tell me how solidly they stand with Elliosn's proposal as well. Although the DCCC refuses to lift a finger for progressive champion Lance Enderle-- even though Obama won the district 52-46%-- this is a winnable race and no one seems to be able to figure out why Steve Israel is so adamant about protecting Mike Rogers' career. Rogers will certainly never support the Inclusive Prosperity Act (on the other hand, would Israel?) No question about Enderle though:
"I fully support Congressman Keith Ellison’s bill H.R. 6411, to strengthen middle class financial security. This is the first step to stop the predatory financial speculation which was at the root of our financial collapse and helped bring down the middle class. I am proud to support a bill that demands equitable accountability from our financial institutions, and more importantly holds them to America’s social contract."

Aryanna Strader is in a similar district-- Obama won it in 2008. And like in Lance's case, there's a very senior Republican there and Steve Israel refuses to allow the DCCC to help her beat him. Undre the new blue boundaries Obama had a tight margin-- 50-49%-- but Aryanna is a very compelling candidate... and there are few in Congress as odious as War Against Women fanatic Joe Pitts. Pitts is also a suck-up to Wall Street and there's no need to wait to see him sign on to Ellison's bill. Aryanna, on the other hand, would love to vote for it:
"This is precisely the kind of common sense measure that members of Congress should be working on. As a small business owner I don't take financial risks like I am at a casino and, like most Americans, I don't want to continually bailout Wall Street traders who assume no responsbility for their actions. Even my children know better than to put their hand near an open flame."

Nate Shinagawa (NY-23) is also in a district that Obama won and also in a situation where the DCCC isn't doing anything to help get him reelected. He's not even running against a powerful senior incumbent-- just some schlubby racist teabagger, Tom Reed. "There are still too many ways," Nat told us this morning, "for an unchecked Wall Street to send us back to the dark days of the recession, and the incentives for taking those risks with our money is still too high. The Inclusive Prosperity Act will help prevent the giant swings like the recession, and also keep our day to day commodities, like milk and gas prices, more stable. This is a tried and true piece of legislation that will keep our economy growing safely, and make it fairer for middle and working class families."

And Dr. Syed Taj (MI-11) in the Detroit suburbs, is also running for a seat in a district Obama won. DCCC? AWOL. But Keith Ellison endorsed Dr. Taj and Dr. Taj is completely into his proposal and can't wait to get to Congress to help pass it. "The Inclusive Prosperity Act asks a sector that can afford it the most to pay its fair share. This will not only help our long-term fiscal outlook, but curb the speculation and Wall Street greed that brought our financial system to the brink of collapse."

John Nichols is one of the journalists dubbing this the Robin Hood tax. He points out that the pittance being taken from wealthy speculators in this tax, raising $350 billion, would "in combination with the elimination of Bush-era tax cuts for the wealthy and aggressive moves to prevent the sheltering of assets in tax havens-- would make a mockery of Republican vice presidential candidate Paul Ryan's fantastical claims about fiscal crisis."
“We’re not broke,” Ellison says of the United States. “We’ve got plenty of money. It’s just not in the hands of the American people because the people with so much of the wealth bought lobbyists and influence to get loopholes for themselves so that they would not have to pay for the civilization that is America.”

Along with more constrained proposals by U.S. Senator Tom Harkin, D-Iowa, and Congressman Peter DeFazio, D-Oregon, the Ellison plan seeks to extract a small amount of the money that speculators now pocket in order to pay for vital public services.

“The money is in the hands of the most privileged and well-to-do Americans, many of whom churn-- and I don’t say ‘trade,’ I mean ‘churn’-- stocks, bonds and derivatives on Wall Street,” the congressman from Minnesota explained during last week’s Democratic National Convention, when he appeared at a “Progressive Central” event organized by Progressive Democrats of America and supported by many activist groups and The Nation.

“So one of the ways for us as Americans to recoup the money is to tax them when they do this churning of these financial assets,” Ellison continued. “It’s a transaction tax. It is appropriately named by its most vigorous advocates a ‘Robin Hood Tax.’”

...[I]f Congress makes the rich pay their fair share, cracks down of off-shore tax havens and makes taxes the speculators, America is not-- and will never be-- broke.

You can help bolster support for Ellison's bill by supporting Lance Enderle, Aryanna Strader, Nate Shinagawa and Syed Taj here.

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