Robert Pollin Quotes
One measure for promoting both stability and fairness across financial market segments is a small sales tax on all financial transactions - what has come to be known as a Robin Hood Tax. This tax would raise the costs of short-term speculative trading and therefore discourage speculation. At the same time, the tax will not discourage "patient" investors who intend to hold their assets for longer time periods, since, unlike the speculators, they will be trading infrequently.
Pollin, Robert. "The Political Economy of a Left Economic Program." Interview by C. J. Polychroniou. Truthout, 2016.
The States sold bonds to finance the their efforts in the Revolutionary War. Some states had better prospects for redeeming their bonds than others. Georgia, South Carolina and North Carolina in particular had poorer prospects than most and their bonds were selling at about 25 cents on the dollar. Alexander Hamilton, then the Secretary of the Treasury, wanted the new Federal government to assume the state’s war debt and pay off the bonds. He made his proposal for how he would accomplish this on January 14, 1790. He delivered his report and proposal to Congress “Report on the Public Credit”. As soon as Hamilton’s proposal was read in Congress, sophisticated speculators set off for the Southern States to buy up as many bonds as they could before the owners found out that a Federal bail-out was under serious consideration. They could easily double, triple or even quadruple their money. Many congressmen wanted to outlaw the speculation. See {619929} & {619939}. The pro-speculation forces got their way. Some speculators made fortunes. Most bondholders lost money.
Keynes was suggesting a small transfer tax on securities and other financial instruments. For investors, such a tax would not be a significant burden, but it would discourage pure speculation. Generally every one likes that idea except the speculators. They in turn, play off one nation or jurisdiction against the others by threatening to take their stock and bond markets to other nations which do not have such a tax. That has worked for almost a century in avoiding such a tax in the United States which is the center for both world investment and speculation.
Speculation meant real estate investment and business.
While the majority of the country approve of a financial transaction tax on the stock market, the financial industry has always fought it tooth and nail. It was a long tradition that the Barons and leading aristocrats lands were exempt from the taxes of the king, the most powerful forces in a democracy have lobbied to avoid taxation on their enterprises and finance is one of the very few business areas that have avoided taxation in America. Other than not liking taxes in general, Wall Street and the Banks argue that many financial transactions involve buying and selling securities in huge volume and making a tiny percentage on each share. If there were a tax of even a fraction of one percent, all these profitable trades would become unprofitable. Critics argue that that kind of speculating does not help the economy at all, and is what makes the discriminatory, unfair, computer trading possible and it would be a good reform to make that kind of trading unprofitable as more than 99 percent of the people cannot participate in it nor profit from it.
Robert Pollin is an American economist. He is a professor of economics at the University of Massachusetts Amherst and founding co-director of its Political Economy Research Institute (PERI). He has been described as a leftist economist and is a supporter of egalitarianism.
