In an ad appearing in the April 23 New York Times and other media, National Nurses United (NNU) called out Wall Street’s reckless traders for endangering the economy and urged the public to support a financial transaction tax that would raise much needed revenue and curb rampant speculation.
“Reckless trading can bring down the economy again. A tiny tax on stock trades will make us safer,” reads the ad’s introductory statement.
NNU with a membership of nearly 185,000 registered nurses has made the financial transaction tax, also known as the Robin Hood Tax, one of its legislative priorities.
In the ad, NNU asks people to show their support for HR 1579, the Inclusive Prosperity Act by Rep. Keith Ellison, which would allow the government to collect a small tax on speculative financial trades.
A Robin Hood tax like the one in HR 1597 “would curb some of the worst abuses in the market today while generating hundreds of billions of dollars in revenue we need for jobs, health care, and so many other critical needs for our nation,” said Jean Ross, co-president of NNU.
In a 2011 Issue Brief for the Center for Economic Polity Research, Dean Baker estimates that a Robin Hood Tax similar to the one proposed in HR 1579 would generate $160 billion a year in tax revenue, money that could be put to use making public improvements such as building schools, expanding health care access, and upgrading public infrastructure. Public investments like these could generate tens of thousands of good-paying jobs.
A Robin Hood tax would have the added benefit of curbing reckless speculation, which has become more prevalent.
As financial trading has become more automated, the cost of trading “has plummeted,” which in turn, has fueled more speculation, reads reads a 2009 letter from economist supporting a financial transaction tax.
A modest financial tax would curb speculation by making it more costly.
Opponents of a financial transaction tax argue that it would stifle productive investments, but as former Goldman Sachs investment banker Wallace Turbeville said at a press conference last year, speculative trades have little productive value. They don’t raise money for capital investments or research; instead they are an end in themselves whose purpose is to enrich a few well-connected investors.
While making the cost of speculation higher, a modest financial transactions tax would have a “very limited impact on trades that have real economic value,” reads the economists’ letter.
It was rampant speculative trading that caused the crash of 2008 and the Great Recession that followed. High frequency trading multiplied the damaging effects of financial speculation.
“Regulators tell us that high frequency trading acted like an accelerant an arsonist would use that causes a fire to burn very bright,” Turberville said.
This fire had a devastating impact on millions of working people, costing them their jobs and/or their homes.
But the financial sector has done little to prevent another fire.
A Robin Hood Tax would make the speculators pay for some of the damage they’ve done.
Turberville said that it also “will bring some discipline to the markets” and that “rampant extraction of value by high frequency traders with no value added in return will be curbed.”