A columnist writing for The Nation says President Obama could pay for an expansive new job creation program by taxing financial transactions by Wall Street traders. The author notes that top national economists, such as UMass Amherst economics professor Nancy Folbre, have supported the idea, noting that European countries already have such taxes. Folbre argues that the current U.S. tax policy encourages speculation in financial instruments that don’t invest in productive outcomes. (The Nation, 8/31/11)
University of Massachusetts Amherst economics professor Nancy Folbre , a MacArthur Fellowship recipient who has consulted with the World Bank and the United Nations Development Office professor of economics at the University of Massachusetts Amherst, praised the NNU’s “Tax Wall Street” campaign in a recent New York Times piece that explained the push in an international context.
“Purchases of stocks, bonds and other financial instruments in the United States go untaxed but for a tiny fee on stock trades that helps finance the Securities and Exchange Commission. In Britain, by contrast, a 0.5 percent tax on stock transactions raises about $40 billion a year. President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany recently announced plans to introduce a similar tax in the 27 nations of the European Community,” wrote Folbre.  “Our current tax policies favor speculative investment in financial instruments over productive investments in human capabilities. This imbalance helps explain why nurses’ unions in the United States (NNU) have been particularly outspoken advocates of a financial transactions tax. As they put it: ‘Heal America. Tax Wall Street.’ ”