A financial transaction tax could help ensure Wall Street works for Main Street

In a new report, EPI’s Josh Bivens and Hunter Blair write that a financial transaction tax (FTT).

What this report finds: A well-designed financial transaction tax (FTT)—a small levy placed on the sale of stocks, bonds, derivatives, and other investments—would be an efficient and progressive way to generate tax revenues. Gross revenues from a well-designed FTT would likely range from $110 billion to $403 billion. And net revenues (including offsets from reduced income, payroll and capital gains taxes, and increased borrowing costs) would likely be substantially higher than some other recent estimates indicate. This is mainly because other estimates’ assumptions about the volume of financial transactions an FTT would crowd out are too high, and because an FTT is likely to redistribute rather than reduce overall incomes. Regardless of the level of revenues raised, an FTT would be a win-win for the U.S. economy. Higher revenues would result in more funds for social insurance programs and much-needed public investments. Lower revenues would be the result of the FTT crowding out financial transactions of little value to the U.S. economy. This would boost Americans’ incomes through lowering fees on financial services, such as the management of 401(k)s and other accounts.

Why this matters: As the U.S. economy continues to recover from the 2008 financial crisis and the ensuing Great Recession, an FTT would help ensure the financial sector compensates other sectors of the economy (particularly U.S. households) for the damage the sector inflicted. Through generating tax revenues, decreasing the fees Americans pay on their investments, and shrinking unproductive parts of the financial sector, an FTT would help Wall Street work for Main Street.

Source: A financial transaction tax could help ensure Wall Street works for Main Street

JEC Releases March State-by-State Economic Snapshots

WASHINGTON, D.C. – Today, the U.S. Congress Joint Economic Committee (JEC) released the March 2012 edition of its state-by-state snapshots which detail each individual state’s economic progress for the previous month.  The report shows widespread private-sector gains reaching nearly four out of five states, with 285,000 private-sector jobs added nationally in January.

Senator Bob Casey (D-PA), Chairman of the JEC said, “We saw an encouraging number of jobs added extensively across the country with the start of the New Year.  It is imperative that this momentum continues throughout 2012. While this is reassuring news, too many Americans remain unemployed.

“We still have a long way to go, as is evidenced by the employment situation of our nation’s veterans. With 12.1 percent of our Post-9/11 veterans out of work – nearly four percentage points higher than the national unemployment rate – it is clear that the recent progress has not been far-reaching enough. We must do more to provide career training and assistance to aid veterans in their transition to the civilian workforce.

“Additionally, the excessive rise in gas prices threatens to impede the economic progress we have made in recent months. While there is not a quick solution to combat these rising prices, there are steps we can take to alleviate the strain being felt by millions of Americans at the pump. The No Oil Producing and Exporting Cartels (NOPEC) Act would aid in preventing gas hikes by ensuring that the gas prices are dictated by the free market rather than the nations conspiring to raise prices. As one of the co-sponsors of the NOPEC Act, I urge Congress to pass this bill to ensure that OPEC is held accountable for price fixing. Sky high gas prices cause a huge strain on families that are already struggling to make ends meet. We must ensure that these prices reach more reasonable levels to maintain the economic recovery.”

Report highlights include:

  • Thirty-nine states added private-sector jobs in January.  Texas (73,800) had the largest private-sector gains, accounting for more than one quarter of all private-sector jobs added in the United States, followed by New York (45,500) and Ohio (32,700).  In the past 12 months, 46 states and the District of Columbia gained private-sector jobs, with Texas (332,600), California (167,500) and New York (136,700) recording the largest gains.
  • Forty-five states and the District of Columbia saw their unemployment rates decline in January, with fourteen states recording statistically significant decreases.  Mississippi and Missouri (-0.5 percentage point each) experienced the largest decreases.  In the past 12 months, Michigan reported the largest decline in the unemployment rate (-1.9 percentage points), followed by Utah (-1.8 percentage points).
  • Manufacturing employment expanded in 39 states in January. The largest gains were in Michigan (16,300), followed by Missouri (4,300) and New Jersey (4,000).   In the past 12 months, eight states – Michigan, Texas, Ohio, Indiana, Washington, Iowa, South Carolina and Illinois– each added more than 10,000 manufacturing positions.
  • Thirty-four states added jobs in the professional and business services sector in January.  New York (18,400), Texas (18,100) and Arizona (9,400) posted the largest increases. In the past year, 44 states and the District of Columbia have added professional and business services jobs.
  • Thirty-eight states added jobs in the leisure and hospitality sector during January. Texas (17,100), Ohio (6,800) and New York (6,600) saw the largest gains. In the past 12 months, 34 states and the District of Columbia added leisure and hospitality jobs.

The report entitled “Understanding the Economy: State-by-State Snapshots,” features key economic statistics for each state. (Data concerning Nevada starts on page 59.)  The report is the second edition of 2012 released by the Chairman of the JEC and uses recently released state-level data to explain how the economic recovery is unfolding in each state.