Protesters Rally Around Trading Tax
After weeks of waving signs and chanting with no clear policy objective, Occupy Wall Street protesters finally have an issue to rally around: a tax on Wall Street.
Known in Occupy movement parlance as the “Robin Hood tax,” taxes on trades of stocks, bonds and derivatives are getting a fresh look on Capitol Hill and may draw thousands of protesters to Washington, D.C., next week. Helping lead the charge are an unlikely breed of tax activist: registered nurses.
At least 1,000 nurses are expected to rally in front of Treasury Secretary Timothy Geithner’s office on Nov. 3, on the eve of the G-20 finance ministers meeting in Cannes, France, where a European transaction tax will be on the agenda. That group is led by the AFL-CIO affiliate National Nurses United, which already organized two rallies in Manhattan and D.C. in June around the slogan: “Tax Wall Street and heal Main Street.” The nurses are also helping organize protests in Europe.
Now the nurses are being joined by the Occupy Together movement, whose organizers are planning Robin Hood tax rallies internationally to promote the tax, including one in McPherson Square on Saturday by Occupy DC. Buoyed in part by anti-Wall Street sentiment, Sen. Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-Ore.) will introduce transaction tax legislation as early as next week.
“There [are] people in the streets angry about economic inequality, and angry about what Wall Street has gotten away with,” said Lisa Donner, executive director of Americans for Financial Reform, which supports both bills. “The European community is moving ahead with a serious proposal.”
There’s also pressure on the super committee to find revenue sources, Donner noted. Dozens of labor, environmental and progressive groups signed on to an Oct. 21 Americans for Financial Reform letter to the Joint Committee on Deficit Reduction, urging the panel to look for federal savings in a financial transactions tax.
A “minuscule” tax of as little as 1 cent per $100 of financial transactions globally would raise more than $200 billion a year according to the International Monetary Fund, the letter stated. Transaction tax proponents argue that it would not only generate much-needed federal revenue, but slow the kind of high-speed stock and derivatives trading that sent markets into a “flash crash” last year.
But slowing trading hurts the economy, argue transaction tax opponents, which include influential Wall Street firms, finance industry lobbyists and trade associations. The U.S. Chamber of Commerce will send its own letter to the super committee and to Members of Congress next week arguing that such a tax would harm investors and make the U.S. less economically competitive.
“This is an easy sound bite that has devastating consequences,” said Tom Quaadman, a vice president of the chamber’s Capital Markets Center. He noted that both the U.S. and Sweden have experimented with such taxes in the past, without success.
Until now, Wall Street interests opposed to the tax have enjoyed a strong ally in Geithner, who has rejected the idea in public statements. But as Europe struggles to resolve the Greek debt crisis, both French and German leaders have sought support for such a tax through the G-20. Last month, half a dozen leading trade associations wrote to Geithner to “reiterate our strong opposition to the imposition of a financial transaction tax in the United States.”
“Particularly once everyday savers and investors realize this is a tax on them, I believe politically there would not be support for this,” said Kenneth Bentsen, executive vice president of public policy and advocacy at the Securities Industry and Financial Markets Association, which spearheaded the letter. “But it’s something we have to take seriously.”
A DeFazio aide acknowledged that legislation to impose a tax on stock trades and other financial services transactions is virtually dead in the water in the GOP-controlled House. But he noted that the budget deficit is not going away, and that such a tax is a logical place to look for revenue sources. A Friday Capitol Hill briefing on the transaction tax turned into a standing-room-only event.
“It was twice as many people as we were expecting,” said Nicole Woo, director of domestic policy at the Center for Economic and Policy Research, a nonprofit that has helped buttress the academic case for a transaction tax. “To me, that is a sign that people are taking this pretty seriously.”
Nurses coming to Washington next week will demonstrate outside Geithner’s office and fan out over Capitol Hill in favor of a Wall Street tax. For the nurses, who have set up first aid stations at more than a dozen Occupy locations around the country, economic issues tie directly into health care, National Nurses United spokesman Carl Ginsburg said.
“When you have broad, enduring [economic] decline, people get sick,” Ginsburg said. “We desperately need revenues for our communities.”