Monday, November 28, 2011

"Things to Tax" - Paul Krugman

Total US Tax Revenue as a Percentage of GDP

Total US tax revenue as a percentage of GDP

As a percentage of GNP, the total tax burden in the United States is at its lowest level since 1959.

"Things to Tax" by Paul Goodman

Excerpt: "And it’s instructive, too, to note that some countries already have financial transactions taxes — and that among those who do are Hong Kong and Singapore. If some conservative starts claiming that such taxes are an unwarranted government intrusion, you might want to ask him why such taxes are imposed by the two countries that score highest on the Heritage Foundation’s Index of Economic Freedom." 

A.A. I have long supported a financial transaction tax. During my 1950s' boyhood, the commission on a typical stock trade ranged from $50.00 to $100.00 -- in today's dollars. Since the 1980s, that range has been between $7.00 and $10.00. Tens of billions of dollars of revenue could be raised from Americans who are in the best position to pay by imposing a $15.00 stock transaction tax, a tax that would still leave contemporary traders paying far less on their stock transactions than they paid during the boom years of the Eisenhower administration. Krugman also notes: "Because there are so many transactions, such a fee could yield several hundred billion dollars in revenue over the next decade. Again, this compares favorably with the savings from many of the harsh spending cuts being proposed in the name of fiscal responsibility. But wouldn’t such a tax hurt economic growth? ... The evidence suggests not — if anything, it suggests that to the extent that taxing financial transactions reduces the volume of wheeling and dealing, that would be a good thing."

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