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

Bernie Sanders: Agenda for America—12 Steps Forward

Bernie Sanders, a challenger to Hillary Clinton, for President of the United States has put forth his “Agenda for America”

  1. Rebuilding Our Crumbling Infrastructure
    We need a major investment to rebuild our crumbling infrastructure: roads, bridges, water systems, waste water plants, airports, railroads and schools. It has been estimated that the cost of the Bush-Cheney Iraq War, a war we should never have waged, will total $3 trillion by the time the last veteran receives needed care. A $1 trillion investment in infrastructure could create 13 million decent paying jobs and make this country more efficient and productive. We need to invest in infrastructure, not more war.
  2. Reversing Climate Change
    The United States must lead the world in reversing climate change and make certain that this planet is habitable for our children and grandchildren. We must transform our energy system away from fossil fuels and into energy efficiency and sustainable energies. Millions of homes and buildings need to be weatherized, our transportation system needs to be energy efficient and we need to greatly accelerate the progress we are already seeing in wind, solar, geothermal, biomass and other forms of sustainable energy. Transforming our energy system will not only protect the environment, it will create good paying jobs.
  3. Creating Worker Co-ops
    We need to develop new economic models to increase job creation and productivity. Instead of giving huge tax breaks to corporations which ship our jobs to China and other low-wage countries, we need to provide assistance to workers who want to purchase their own businesses by establishing worker-owned cooperatives. Study after study shows that when workers have an ownership stake in the businesses they work for, productivity goes up, absenteeism goes down and employees are much more satisfied with their jobs.
  4. Growing the Trade Union Movement
    Union workers who are able to collectively bargain for higher wages and benefits earn substantially more than non-union workers. Today, corporate opposition to union organizing makes it extremely difficult for workers to join a union. We need legislation which makes it clear that when a majority of workers sign cards in support of a union, they can form a union.
  5. Raising the Minimum Wage
    The current federal minimum wage of $7.25 an hour is a starvation wage. We need to raise the minimum wage to a living wage. No one in this country who works 40 hours a week should live in poverty.
  6. Pay Equity for Women Workers
    Women workers today earn 78 percent of what their male counterparts make. We need pay equity in our country — equal pay for equal work.
  7. Trade Policies that Benefit American Workers
    Since 2001 we have lost more than 60,000 factories in this country, and more than 4.9 million decent-paying manufacturing jobs. We must end our disastrous trade policies (NAFTA, CAFTA, PNTR with China, etc.) which enable corporate America to shut down plants in this country and move to China and other low-wage countries. We need to end the race to the bottom and develop trade policies which demand that American corporations create jobs here, and not abroad.
    [Sign the petition to stop the Trans-Pacific Partnership — another trade deal disaster]
  8. Making College Affordable for All
    In today’s highly competitive global economy, millions of Americans are unable to afford the higher education they need in order to get good-paying jobs. Further, with both parents now often at work, most working-class families can’t locate the high-quality and affordable child care they need for their kids. Quality education in America, from child care to higher education, must be affordable for all. Without a high-quality and affordable educational system, we will be unable to compete globally and our standard of living will continue to decline.
  9. Taking on Wall Street
    The function of banking is to facilitate the flow of capital into productive and job-creating activities. Financial institutions cannot be an island unto themselves, standing as huge profit centers outside of the real economy. Today, six huge Wall Street financial institutions have assets equivalent to 61 percent of our gross domestic product – over $9.8 trillion. These institutions underwrite more than half the mortgages in this country and more than two-thirds of the credit cards. The greed, recklessness and illegal behavior of major Wall Street firms plunged this country into the worst financial crisis since the 1930s. They are too powerful to be reformed. They must be broken up.
  10. Health Care as a Right for All
    The United States must join the rest of the industrialized world and recognize that health care is a right of all, and not a privilege. Despite the fact that more than 40 million Americans have no health insurance, we spend almost twice as much per capita on health care as any other nation. We need to establish a Medicare-for-all, single-payer system.
  11. Protecting the Most Vulnerable Americans
    Millions of seniors live in poverty and we have the highest rate of childhood poverty of any major country. We must strengthen the social safety net, not weaken it. Instead of cutting Social Security, Medicare, Medicaid and nutrition programs, we should be expanding these programs.
  12. Real Tax Reform
    At a time of massive wealth and income inequality, we need a progressive tax system in this country which is based on ability to pay. It is not acceptable that major profitable corporations have paid nothing in federal income taxes, and that corporate CEOs in this country often enjoy an effective tax rate which is lower than their secretaries. It is absurd that we lose over $100 billion a year in revenue because corporations and the wealthy stash their cash in offshore tax havens around the world. The time is long overdue for real tax reform.

Advoacy: Trans-Pacific Partnership

— by Senator Bernie Sanders

Since 2001, the United States has lost more than 60,000 factories and millions of decent-paying jobs. Enabled by free trade agreements like NAFTA, corporations shut down factories in this country to move abroad where they can get away with paying workers pennies an hour.

Fighting against these disastrous free trade deals has been a principal focus of my 24 years in Congress. I voted against NAFTA, CAFTA and permanent normal trade relations with China, because we need trade policies that rebuild our manufacturing sector, not agreements that will lead to fewer jobs and lower wages.

The newly-proposed Trans-Pacific Partnership, written behind closed doors by corporate lobbyists, is the biggest free trade agreement of all. It’s part of a global race to the bottom to boost the profits of large multi-national corporations by outsourcing jobs; undercutting worker rights; and dismantling labor, environmental, health, food safety and financial laws.

Wall Street, the pharmaceutical industry and major media companies that stand to benefit from this agreement are now pressuring Congress to authorize the TPP treaty without allowing lawmakers due process to revise it in order to ensure the deal benefits American workers. They’re lobbying for a “fast track” process to deny senators the right to amend the agreement in order to represent their constituents’ best interests.

We can’t afford to let them rubber stamp another disastrous free trade deal that would lead to the loss of more American jobs.

Sign-the-Petition-blu.fw

Are We Returning to a Path of Owing Our Souls to the Company Store?

The Center for American Progress recently completed two related reports that are read-worthy:

Cash for Homes: Policy Implications of an Investor-Led Housing Recovery

Across the country, investors have been taking advantage of the nation’s foreclosure crisis to purchase homes at bargain prices, often beating out potential homeowners who have been a bit hesitant to purchase, frequently choosing to sideline themselves. In July 2013, cash-on-hand investors bought about 55 percent of the homes sold in Las Vegas and numerous properties in other major metropolitan areas such as Miami, Phoenix, and Prince George’s County, Maryland, a suburb of Washington, D.C.

Investors can play a key role in a housing recovery. By absorbing excess inventory, they establish a floor for home prices and jump-start appreciation. Responsible investors can also offer quality, affordable rental opportunities to families who may be locked out of home ownership due to foreclosure or lost wealth from the recession.

But while they can support communities, irresponsible investors can also destroy them by allowing properties to sit empty, declining to bring rental properties up to code, and neglecting tenants’ needs in instances where the home is occupied. Additionally, investors that buy large quantities of properties in a single area can cause prices to overheat and increase market volatility. Conversely, if institutional investors following a set business plan sell numerous properties in the same time frame, prices in those neighborhoods could decline again.

Read this full PDF report here

When Wall Street Buys Main Street
The Implications of Single-Family Rental Bonds for Tenants and Housing Markets

In October 2013, an institutional investor created the first triple-A-rated, mortgage-backed security supported by revenue from single-family rental properties, a development that may offer even lower-cost financing to institutional buyers than has been available thus far through bank credit lines. A mortgage-backed security is created by pooling assets together and then selling interests in that pool to investors, who then receive regular payments from the asset pool. This process provides access to a much larger pool of investors than would otherwise be feasible, increasing liquidity and generally providing a less expensive source of funding than traditional borrowing from banks or private investors.

In this instance, a subsidiary of the private equity firm Blackstone took out a $479.1 million loan from Deutsche Bank that was secured by a pool of more than 3,000 single-family rental homes. The loan was then turned into a security that was purchased by investors, who now receive monthly rental cash payments from the homes. If the loan is not repaid, the trustee—the legal representative of the bondholders—has the right to seize the homes.

The emergence of a new form of mortgage-backed securities tied to single-family rentals is certain to have an impact on the housing market, communities, and tenants. Analysts predict that the funding of single-family rental acquisitions through securitization will likely become a dominant model quickly; American Homes 4 Rent and Colony American Homes, two new single-family rental firms, are reportedly preparing to launch single-family rental bonds in the coming months. The market for this new asset class is expected to top $70 billion per year by 2016, on par with the bond financing for apartment buildings, casinos, and commercial real estate for this year. While institutional investors only represent a fraction of those in the housing market—mid-sized companies and small mom-and-pop investors who own less than 10 properties are currently far more prevalent in most markets—securitization may begin to shift this balance.

Depending on the success of this new asset class, investor appetite for these types of bonds may boost the size and scope of this relatively new and untested industry to a level that may not be sustainable, either because the industry does not have the capacity to manage thousands of new homes or because a significant increase in purchases inflates home prices.

Read the full PDF Report here.


This material above was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

Don’t Tax My Credit Union

Apparently, #MoveYourMoney is hurting the bottomline of the big banks and they’re starting to pull the strings on the Congressmen they bought in this last election.  This 30-second spot focuses on the credit union mission, how credit unions are rooted in their communities and why credit unions are tax-exempt — and must stay that way. Don’t Tax My Credit Union!