The Inclusive Prosperity Act
As Bernie Sanders sees it, Wall Street got a big boost when U.S. taxpayers bailed out some of the largest financial institutions in 2008. Now it's time for Wall Street to return the favor.
Sanders has proposed something he calls a speculation tax, a small levy on every stock, bond or derivative sold in the United States.
The revenue would go toward free tuition at public colleges and universities and would also be used to pare down student debt and pay for work-study programs, as well as other programs, Sanders says.
While Hillary Clinton has proposed a similar tax on high-speed trading, Sanders' plan would go much further.
Both candidates say their tax would cut back on computer-generated, high-speed trading, which is often accused of …show more content…
Rep. Keith Ellison of Minnesota in a bill called the "Inclusive Prosperity …show more content…
But the Tax Policy Center said the potential revenue would be less than one-tenth of that.
One reason for the big disparity between the estimates is that no one really knows how Wall Street firms would respond if such a tax was imposed.
John Cochrane, senior fellow at the Hoover Institution at Stanford University, said many firms would find ways to get around the tax, by routing transactions through overseas markets, or trading options instead of stocks, for instance.
"It'll induce some very clever financial innovation of how to get around it," Cochrane said, "because there's ways to trade without incurring the tax, and, as a result, I don't think it'll gain much revenue."
"The cleverness of our financial engineers shouldn't be underestimated," he added.
Although the tax would be imposed on big banks and other large financial institutions, at least some of the pain would end up getting passed on to small investors, through higher costs to pension and insurance funds that invest in Wall Street, Burman said.
But Warren Gunnels, policy director for the Sanders campaign, argued that if Wall Street firms pass on the cost to investors, tax credits would be available to help low- and moderate-income people defray the
Sanders has proposed something he calls a speculation tax, a small levy on every stock, bond or derivative sold in the United States.
The revenue would go toward free tuition at public colleges and universities and would also be used to pare down student debt and pay for work-study programs, as well as other programs, Sanders says.
While Hillary Clinton has proposed a similar tax on high-speed trading, Sanders' plan would go much further.
Both candidates say their tax would cut back on computer-generated, high-speed trading, which is often accused of …show more content…
Rep. Keith Ellison of Minnesota in a bill called the "Inclusive Prosperity …show more content…
But the Tax Policy Center said the potential revenue would be less than one-tenth of that.
One reason for the big disparity between the estimates is that no one really knows how Wall Street firms would respond if such a tax was imposed.
John Cochrane, senior fellow at the Hoover Institution at Stanford University, said many firms would find ways to get around the tax, by routing transactions through overseas markets, or trading options instead of stocks, for instance.
"It'll induce some very clever financial innovation of how to get around it," Cochrane said, "because there's ways to trade without incurring the tax, and, as a result, I don't think it'll gain much revenue."
"The cleverness of our financial engineers shouldn't be underestimated," he added.
Although the tax would be imposed on big banks and other large financial institutions, at least some of the pain would end up getting passed on to small investors, through higher costs to pension and insurance funds that invest in Wall Street, Burman said.
But Warren Gunnels, policy director for the Sanders campaign, argued that if Wall Street firms pass on the cost to investors, tax credits would be available to help low- and moderate-income people defray the