re: #253 Dark_Falcon

Yes, I understand the stated purposes of the proposed taxes. To those purposes, I answer with the following points:

1: A transaction tax imposed on financial firms will be promptly passed on to customers in the same way most taxes on businesses are. Thus the proposed tax’s greatest effect will be to indirectly increase the tax burden on the public.

You do realize that Financial services is a very, very competitive industry right? If there are two investment strategies which promise an equal return but have different tax obligations, then the less taxed option will become the industry standard. A tax on certain types of business will shift investing practices without increasing costs terribly. It also won’t raise much money.

3: A “bank tax” would again be at least partially passed on to customers and would also potentially subject investment institutions to having their tax rates set based on the decision of government regulators as to what is and is not ‘reasonable’. Such decisions by said regulators might not even be driven by economic concerns, but rather by the political views of the administration in power. Such taxes offer a large opportunity for government to interfere in the private sector yet more.

This isn’t any different than any other form of tax. Do you really think the teahadis opposition to progressive income taxation is a rational economic decision?

3.1: Lastly, the idea of banks “paying for their own cleanup” is risible in my eyes. What will instead happen is that Congress will just spend the additional monies brought in by such a “bank tax” (or at best use it to pay off debt) and then get caught in bind if a bailout is needed.

There is such a thing as a separate funds within the government. The FDIC or the gas tax are both good examples of this. Funds collected through both of these institutions don’t get passed into the general fund, but rather are spent on coverings deposits in failed banks and highway maintenance respectively. Assuming that bank cleanups are run by a quasi-independent government body there is no reason to think that the funds from the bank tax would go anywhere near congress.