dobrojim wrote:How partisan, or perhaps I should say ideological, is the analysis?
Going back several decades, there was a group of economists who
claimed the Clinton 93 or 94 tax increases would be a job killer and
hurt the economy. Not much evidence of that. Also not much evidence
in the constant claims by certain ideologues that tax cuts pay for themselves.
The CBO used to be pretty robust ie non-ideolgical so I am not claiming this is all wrong.
I am skeptical.
Just reading the article cited here, it might be partisan but I don't think that's really the main issue. The bigger issue is that it's skewed with the concept of benefiting financial markets for their own sake and that's a place where both parties have been clearly infiltrated, so to speak. There needs to be some sort of answer to the question of "who does this benefit besides high volume traders or high quantity investors?" and that doesn't actually seemed to be answered here.
I don't love Bernie's plan and prefer something that would be a bit simpler/easier to enforce and less easily avoided but this doesn't strike me as an argument against it. They even admit that the evidence they're using to suggest that taxing day trading leads to less stable prices is from a time before the rise of high-frequency trading which suggests that they don't really have much in the way of actual evidence at all. It does read like a handy argument to support not doing something wealthy investors don't want because it's relatively easy/safe money for them. They also point out that many European countries have such taxes and it hasn't actually been a problem and would, in fact, mitigate a lot of the issues they're talking about.
As for concerns of well-informed investors no longer taking part, that's a load of baloney. They just wouldn't be as incentivized to flip back and forth a bunch of times to maximize profits on repeated trades, though they could still do that, and would be more incentivized to back longer term viability of businesses which is actually what we should hope for.
Honestly, after reading that CBO analysis, I came away more in support of Bernie's transactional tax, not less. The one catch is that I do agree that banking on his estimates of the amount of income it would generate in order to fund something is dangerous. I think he's vastly overestimating the amount it would bring in, though I suspect that the CBO is also slightly underestimating a bit. The tax, in and of itself, isn't necessarily the problem. It would have potentially two main consequences: increasing government income, and reducing day-trading. I don't see either of those as particularly bad things. Trying to fund something else with money that isn't there, though, is an is an issue - particularly when dealing with the underlying cost explosion isn't being dealt with.
As for dck's point about simplifying the tax code, on its own, I don't actually see this as something that couldn't be done in tandem to that. Bernie isn't talking about that, though, nor is anybody, really. Fixing the taxes that are already in place before going about imposing a bunch of others makes sense. This is a society that prefers to simply leave inner cities behind and just move a few miles down the road into the suburbs, though, so...