Robin Hood Is Coming to Washington
Sen. Bernie Sanders (I-VT) and Rep. Keith Ellison (D-MN) want to tax stock and bond trades to pay for free undergraduate education and student loan forgiveness.
**S. 805 and H.R. 1144: Inclusive Prosperity Act of 2017
**S. 805 is a bill sponsored by Sen. Bernie Sanders (I-VT). A related bill in the House, H.R. 1144, was sponsored by Rep. Keith Ellison (D-MN). The summary of the bill reads as follows:
To impose a tax on certain trading transactions to invest in our families and communities, improve our infrastructure and our environment, strengthen our financial security, expand opportunity and reduce market volatility.
This bill would impose a tax on various trading securities — particularly stocks, bonds, and derivatives. It is designed to reduce risky transactions in financial markets and high-frequency trading.
Stock trades would be taxed at 0.5%, bond trades at 0.1%, and derivative trades at 0.005%. In money terms this means that a $1,000 stock trade would be taxed $5, a bond trade would be taxed $1, and a derivatives trade would be taxed a nickel.
There are some exceptions to the tax, including initial issues of securities, and short-term debt securities with a fixed maturity of 60 days or less.
**What This Means for Americans
**Sen. Sanders (I-VT) estimates this proposal could generate up to $300 billion in tax revenue per year and is aimed at funding another bill from Sen. Sanders — The College for All Act — S. 806. S. 806 provides for free undergraduate tuition at 4-year public colleges and universities, reduces student loan interest rates, and refinances existing student loans.
**The Yays Say
**Those who support the bill argue that the cost of college and the escalating rate of student loan debt demand an answer. They compare this small tax to the sales tax paid by ordinary consumers that runs from 8–9%, thus taxing investment bankers, and other wealthier individuals. The people who support this bill include a large coalition of nurses, students, HIV/AIDS activists, labor and housing activists, religious and civil rights groups, and environmentalists. They believe that the money raised from the tax could be used to fund more than education, but could also be put towards healthcare and jobs. In addition, it is believed that this tax would restore stability to financial markets by discouraging high-frequency and risky trades. See more from them here:
The Nays Say
Those opposed to the bill argue that new taxes do not bring money into the economy and that neither the banks nor the bankers will pay the tax — consumers of financial products will.. In addition, they believe that pensions would take a hit — this would have a direct impact on the economy and on people’s savings for retirement. They argue that speculation is inherent to financial markets and trying to reduce it through taxes makes the markets work less efficiently. You can read more about this here:
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