Crash Tax: Wall Street Should Pay Reparations to the 99%

It's time for the bankers who crashed the economy to pay back those of us who bailed them out--with a financial transactions tax.

November 15, 2011  

 

 Wall Street waged war on the American economy and middle class with its reckless gambling.

It wasn’t Fannie Mae or Freddie Mac that crashed the economy. It wasn’t the federal government. It wasn’t hapless homeowners who were sold mortgages they couldn’t afford. It was Wall Street financiers that aggressively sought and bought mortgages to package and sell as derivatives, which the banks could wager on.

Americans bailed out Wall Street, handing it a Marshall Plan for reconstruction after its bad bets blew up the world economy.  Now, three years later, happy days are here again for the Wall Street banksters. They’re hauling in big profits and paying outrageous bonuses. But the American middle class continues to suffer high unemployment, record foreclosures and rising poverty.

So it’s time for Wall Street to pay reparations. It’s time for a crash tax, a tiny sales tax on Wall Street transactions, the revenues from which would pay for Main Street restoration. It’s time for the 1 percent to repay the 99 percent, for Wall Street to share in the sacrifices necessitated by its rogue behavior.

The levy, sometimes called a Tobin Tax after the American economist and Nobel Laureate James Tobin, who endorsed it in the 1970s, is far from shocking or novel.  A financial transaction tax is advocated by a huge range of groups and individuals, from billionaires to conservative heads of state. Thirty nations, including Great Britain and Switzerland, already tax some financial transactions. The United States imposed a similar tax from 1914 to 1966. In addition to raising revenue in a time of government deficits worldwide, the tax would suppress the very kind of risky speculation that got the global economy into this mess.

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