Wonkblog Doesn't Like Financial Speculation Taxes

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Friday, 02 November 2012 09:38

That would be the conclusion of folks who played with its interactive calculator on ways to have President Obama reach his deficit reduction target. The calculator includes several possible taxes which it identifies as "the most popular proposals for wholly new sources of revenue." A financial speculation tax is not included on the list. It does include a value-added tax (VAT), which would effectively be a national sales tax.

A bill calling for a financial speculation tax was sponsored last year by Tom Harkin in the Senate and Peter DeFazio in the House. According to the Joint Tax Committee, the tax would raise almost $40 billion a year in revenue. It has a number of co-sponsors in both chambers. By contrast, there is no current bill calling for a VAT and if any members of Congress support one, they are keeping pretty quiet.

Perhaps there are some poll results showing a great desire for a VAT. Otherwise, we can assume that the decision to include a VAT on the calculator and to exclude a financial speculation tax reflects the relative popularity of the two taxes at the Washington Post.