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Anand Reddi

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Attention Occupy Wall Street: Enact a Financial Speculation Tax

Posted: 11/01/11 05:00 PM ET

"Power concedes nothing without a demand." -Frederick Douglas

The anatomy of revolution is ubiquitous throughout human history. Citizens frustrated at the status quo, magnified by the inequities between the oligarchs and the proletariat, coalesce with one another de novo to voice their frustration. The discontent acts as a chemoattractant bringing together a vanguard composed of disparate masses. As the movement matures, metastasizes, an agenda is developed and refined. Finally, demands emerge.

A frequent criticism of the Occupy Wall Street protesters has been the absence of specific policy demands. I suggest members of Occupy Wall Street focus their movement's raison d'etre by supporting the enactment of a financial speculation tax.

A proposed financial speculation tax, a mere financial "pinprick" for international banks, would be an important stream of revenue to fund investments in education, domestic healthcare, global health, and climate change with the added benefit of reducing the reckless financial speculation practices of international banks.

Sixty countries including France, Germany, Japan, Spain and the United Kingdom are publicly supporting an international financial speculation tax on the $4 trillion-dollar currency transactions market. Last year, Congressman Pete Stark (D-CA) proposed "a small tax -- of five thousandths of one percent, or 0.005% -- on dollar currency transactions. Due to the extreme speculation that takes place, it would raise [at least] $28 billion a year and reduce currency speculation by 14 percent."

Some may argue, as fiscal conservatives surely will, a tax on banks is ill advised at this time given the anemic state of our economy. However, David Stockman, director of the Office of Management and Budget under President Reagan, writes that "while supply-side catechism insists that lower taxes are a growth tonic, the theory also argues that if you want less of something, tax it more. The economy desperately needs less of our bloated, unproductive and increasingly parasitic banking system."

Last week, Senator Tom Harkin (D-Iowa) and Representative Peter DeFazio (D-Ore.) renewed efforts to enact a financial speculation tax. Occupy Wall Street and the associated movements across the United States should demand this initiative.


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Anand Reddi is at the University of Colorado School of Medicine. I dedicate this post to Cassandra Roeca, Steven Simon, and Andreas Thyssen.

 

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