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Published: Tuesday 1 November 2011
While whacking our parents and grandparents with a big cut in Social Security benefits apparently draws bipartisan support, the supercommittee will not even score a plan to tax Wall Street financial speculation.
Supercommittee of the One Percent Won’t Even Think of Taxing Wall Street
If anyone still questioned who owns Washington, the congressional supercommittee charged with reducing projected deficits by $1.2 trillion seems determined to end any doubts. According to press accounts, both the Republicans and Democrats on the committee support a plan to reduce average Social Security benefits by 3 percent.
While whacking our parents and grandparents with a big cut in Social Security benefits apparently draws bipartisan support, the supercommittee will not even score a plan to tax Wall Street financial speculation. No committee member from either party is prepared to make a simple request to the Joint Tax Committee of Congress that would allow a speculation tax to be one of the items considered in the mix.
It’s hard to know which part of this picture is worse. The plan to cut Social Security benefits at a time when seniors are more dependent than ever on them is incredibly pernicious. The people who would see their benefits cuts under this proposal paid for their benefits contributing to Social Security over their entire working career.
Most retirees have little other than Social Security to support them in their retirement. In large part, this is due to the economic mismanagement of the supercommittee types. If they or their friends, like former Federal Reserve Board Chairman Alan Greenspan, actually had been doing their jobs, we would not have had the huge housing bubble that wrecked the economy. The collapse of this bubble caused most of the wealth that retirees and near-retirees had accumulated in their home to disappear, leaving them with nothing other than Social Security to sustain them in retirement. Now, they want to cut Social Security as well.
This particular cut is especially pernicious since it will hit the oldest and poorest beneficiaries hardest. A person who is in their 90s and has been getting benefits for 30 years would see a reduction in benefits of close to 9 percent under the new cost-of-living adjustment formula apparently supported by members of the committee.
The benefit cut is being justified by claiming that the current cost-of-living adjustment exceeds the true rate of inflation. In fact, the Bureau of Labor Statistics index that measures the cost of living of the elderly indicates that the current adjustment understates the rate of inflation experienced by retirees. There should be no doubt, this is a proposal for cutting Social Security benefits; it has nothing to do with making the cost-of-living adjustments accurate.
While the supercommittee has plenty of time to think of ways to make life more miserable for seniors, it won’t even countenance the idea of taxing Wall Street speculation. In spite of the repeated pledges that everything is on the table, taxing Wall Street speculation is absolutely off the table.
In order for a tax bill to be considered by Congress, it must be scored by the Joint Tax Committee (JTC). While many members, including some very senior members from both houses, have requested a score from the JTC of a bill taxing financial speculation, the supercommittee has the JTC completely tied up meeting its requests. By refusing to include a financial speculation tax in its scoring request, the supercommittee is preventing this idea from even being included in the discussion.
Given the role of Wall Street in both creating the conditions for the crash and prospering at the expense of the other 99 percent, it might seem reasonable to include a tax on speculation in the mix of items to consider. This is not a radical proposal. The European Commission is currently on the edge of approving a financial speculation tax. Its leading proponents are the conservative leaders of Germany and France.
It is easy to see that this could be a very substantial source of revenue. The United Kingdom already has a FST. It raises the equivalent of 0.2 to 0.3 percent of GDP ($30-$40 billion a year in the United States), by just taxing stock. If options, futures, credit default swaps and other derivative instruments were also taxed, it is easy to believe that we could raise three to four times as much money in the United States.
But the supercommittee doesn’t want to think about a proposal that would impose serious costs on Wall Street. It is more interested in taking away Social Security and Medicare benefits from the old and disabled.
This contempt for the 99 percent coupled with protection for the 1 percent is the reason Congress has an approval rating of 9 percent. When both parties in Congress work against the interest of the overwhelming majority in order to protect a tiny elite, it is not surprising that most of the country would return the contempt.
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ABOUT Dean Baker
Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is the author of several books, including Plunder & Blunder: The Rise and Fall of the Bubble Economy, The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer and The United States Since 1980. He was the editor of Getting Prices Right: The Debate Over the Consumer Price Index, which was a winner of a Choice Book Award as one of the outstanding academic books of the year. He appears frequently on TV and radio programs, including CNN, CBS News, PBS NewsHour, and National Public Radio. His blog, Beat the Press, features commentary on economic reporting. He received his B.A. from Swarthmore College and his Ph.D. in economics from the University of Michigan.
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14 comments on "Supercommittee of the One Percent Won’t Even Think of Taxing Wall Street"
for the net on the top for the gutetr fish net fabric on top of your wire mesh just cut the large fish net off the rim great vid though
November 02, 2011 7:43pm
Any cuts to Social Security, Medicare or Medicaid will spell the end of the Democratic Party. It ended for me with the slaughter of the Western wolves ( a ploy to get votes from a subset of ranchers) , the Gulf catastrophe, which continues,the President's signing a bill to raise taxes on those making less than $30,000 and I imagine he will cap all this off by approving the xl pipeline. If he starts screaming about climate change I may --possibly--reconsider. Democratic leaders have a strong death wish.
November 02, 2011 11:55am
AMEN WIZARD2000... for most of these people if there is a christian bone in thier body it is because they ate someone!
November 02, 2011 3:44am
"Supercommittee". HA! WHAT A FARCE! Just another smoke screen to make citizens believe the government is actually trying to fix the economy. They have no intention of fixing anything. To fix our economy would mean they would have to hold those responsible for destroying it, accountable. And that will NEVER happen. Too many of the 1% have these politicians in their back pockets. Impeachment and terminations are the only things that are ever going to fix our country.
November 01, 2011 10:48pm
House Republicans passed a resolution today reaffirming "In God We Trust" as our national motto.
Strange, I thought the Republican motto for our country is "In Wall Street We Trust," with Republicans asking themselves every minute of every day "WWWSD?" (What Would Wall Street Do?). I know the difference. Republicans, by and large, just pay lip service to Jesus, while at the same time they pay homage to Wall Street 1 percenters, corporations and individuals alike, because that is where all the money is, where Republicans expect to cash-in after proving their fealty to the fat cats running Wall Street, those who almost ran the U.S. and world economies off a cliff in 2008...and who are still trying, damn the torpedoes, full speed ahead.
Jesus? Bah, humbug, all the Republicans exclaim. Scrooge needs more tax cuts. Scrooge needs less regulations. Scrooge needs to outsource Bob Cratchit's job overseas. And to hell with Tiny Tim, they say. It's Tiny Tim's fault that he doesn't have insurance to cover his life-threatening debility. If the Spirit of Jesus showed up and addressed all these Republican Scrooges, they'd throw stones at him, try to scourge him, and gather together the wood and nails to crucify him...again. So, it is obvious that when certain Republicans in the House pass an "In God We Trust" resolution, the "God" they are supposedly honoring is not the God that Jesus Christ came into this world to teach everyone about. The Republicans' "God" is Wall Street, is money, is fat cat conservative financiers...the very ones that Jesus threw out of the temple, calling all of them thieves.
And Pat Robertson asserted the other day that no Christian would support or attend an OWS protest. The word "clueless" comes to mind. Jesus is present in Spirit with all the peaceful OWS protesters, those who are similarly calling for the "thieves" to be thrown out of the temple of our democracy.
November 01, 2011 4:30pm
Sen. Jon Kyl another SUPER DUP-ER said that "well over" 90 percent of what Planned Parenthood does is perform abortions.
I did want to add that one.....
November 01, 2011 4:28pm
Harry Reid named Baucus to the debt 'super committee' on Aug. 9.... I want to remind you good folks .....Senator from Montana, Max Bacchus, held hearings on health care reform. At the table sat representatives from the Blue Cross, Blue Shiled, HMOs, pharmaceutical companies but yet absent were any advocates of single payer! This seems strange given that the organization, Physicians for a National Health Program (PHNP) had contacted the Bacchus’ weeks ahead of time and tried to gain a seat at the table. At the last minute they were refused a seat. As the hearings started a number of single payer advocates stood up and asked why they were being excluded. Bacchus had them arrested. Among the arrested were nurses and doctors and while they were being led away the insurance representatives at the table were laughing at them. Arrogance to the extreme! Bacchus later said that America does not want single payer! Would it surprise anyone to learn that Senator Max Bacchus has taken more money from the insurance companies than any other politician. I think it is apparent that Senator Max Bacchus is indeed corrupt and in the pockets of the insurance companies. But where was Obama during this? He was silent . All he had to do was make a telephone call and that would have ended it
November 01, 2011 4:03pm
fst tax is a leading reason the ftse has droped to number 4
November 01, 2011 2:49pm
The very concept of Congress, whether in the guise of the Super committee or the JTC, mucking with the SS system is galling to the core. Social Security was and is supposed to be a "TRUST" fund. Where's the trust? That the congress even has a say so in the rates of SS compensation is the result of a book keeping flim flam, (and yes of course it was supported by both parties) foisted on the American public during the reign of our SECOND most criminal president, r.m. nixon. (I never thought he'd be shoved off the number one spot, but I didn't account for g.w. bush).
I am hopeful that #OWS will have the net effect of changing the electoral equation so that even a poor person could someday be elected to congress. We cannot rely on a millionaire to serve the needs of the NON-millionaires.
November 01, 2011 8:16pm
For the first time in my life I
say F#$%um all. I have no trust in the elected officials that are supposed to take care of the 98%.
November 01, 2011 2:47pm
I believe very strongly after much study and research that these rich criminals intend on installing communism in our country and destroy our democracy and constitution. Anyone who says or does nothing are supporters of such an evil plan. It's time for confrontation to happen.
November 01, 2011 6:54pm
"Communism"???
The super-rich (who have corrupted our government and are now turning us all into paupers) are the exact opposite of communists: they're fascists. Fascism is the merger of corporate & state power. China is more fascist than communist... so was the USSR under Stalin.
November 01, 2011 12:53pm
"Tax" is the wrong frame! It should be "FEE"...that's what people pay when they seek to do something special that might affect others...like fishing or driving a car -- you are required to purchase a license! Financial transactions imply such special privilege; unregulated speculation has created havoc. Moreover, instant computer trading has poisoned the market for average investors. (Remember Bush's plan to "privatize Social Security? Lots of luck picking stocks!) It's a rigged system but no one has to pay to play. So let's call this financial cancer what it is and charge a fee to enter the casino. This way (until securities become "people") no individual takes the hit; speculation might be restrained, and fees could create billions in needed revenue. It is not a difficult challenge to implement; just rewrite a bit of code in the trading programs. Look at a statement…There are lots of small fees! And I doubt Wall Street would move to the Euro Zone; they are about adopt a similar program. Just understand that this proposal is not for a “tax”…but for a “FEE”.
November 01, 2011 11:57am
thanks for keeping it real, Mr Baker.
apparently the one iron-clad law of the lawmakers is: Reaganomics Today, Reaganomics Tomorrow, Reaganomics Forever!
I will not waste my vote on either party next time, I'll waste it on the Greens. how could it possibly matter? Republicans are the vicious guard dogs of the 1% and Democrats are their trembling little lap dogs. either way, government has gone to the dogs!
I'm thinking that the worst-case scenario (GOP taking back the govt) might just end up being a blessing in disguise. the Occupy Movement is proving that Americans do have a breaking point, and when push comes to shove, We The People are gonna shove back... hard!