Some Democrats want to tax trading:
A group of House Democrats is proposing to make Wall Street companies and investors pay more of the cost of any financial rescue plan through a new tax.
In a letter sent late yesterday to House Speaker Nancy Pelosi, 16 Democrats asked her to ensure any rescue legislation include a ``transaction tax'' on all U.S. stock trades and on other types of trades, such as credit default swaps, options and futures. They are proposing the tax would be at a rate of one quarter of one percent on all trades.
``The same Wall Street speculators and investors who are principally responsible for having caused this avoidable financial crisis and profited from it must now be required to pay for it, not U.S. taxpayers,'' according to the letter, which was signed by Representative Peter DeFazio, an Oregon Democrat, and Representative Pete Stark, a California Democrat.
Actually, Representatives, this crisis was caused by many players, of which your party, the Democrat Party, was one. By blocking any attempts to reign in the GSEs, you Democrats allowed the mortgage behemoths to take on an astonishingly unstable amount of debt onto their balance sheets which ultimately contributed to their collapse.
Now, there are many other factors that contributed to this debacle, principally Alan Greenspan's Fed, but also lax regulators, the Republican Party for weakening regulatory oversight, mortgage brokers, naive and/or greedy speculators in the housing market, people who bought homes they could not afford, people who think they are entitled to the biggest and nicest home even if they cannot afford it, local and regional banks, appraisers, fraudsters, real estate agents, homebuilders, market cheerleaders, financial academics who preach the gospel of rational and efficient markets, consultants, sleazebag lobbyists, dumb investors who bought the garbage mortgage paper wrapped in derivative structures, and yes, greedy and arrogant Wall Street executives. But also, you Democrats.
However, you members of the Dumb Wing of the Democrat Party (and yes, there is a Dumb Wing of the GOP too (it's much larger - ed.)) want to demonize investors who played no part in this debacle, which is almost all of us. Some of us tried to warn you about it. Did you listen to us, Mr. DeFazio and Mr. Stark? What did you do to try to stop this financial melt-down?
Taxing financial transactions is an enormously stupid proposal. First, it will be burdensome and a bureaucratic nightmare to implement. Second, it will inhibit price discovery and decrease liquidity, increasing the cost to everyone in the market. Third, you will drive trading offshore, which is harmful to the country as the financial services industry is a significant part of the American economy.
Now, Mr. DeFazio and Mr. Stark, I share your frustration with the idiocy of Wall Street. I get it. But your tax is directed mainly at people who had nothing to do with this debacle and the primary effect would be to drive financial services away from the United States.
Ms. Pelosi, this idea should be dead on arrival. We have had eight years of bad government and dumb ideas. We don't need four more.