During the Progressive Democrats of America roundtable in D.C. on July 25, Keith Ellison laid out a theory of taxation that one conservative website characterizes as "closer to Marx than it is to John Locke." (Of course, whether that's a good or bad thing is arguable.)
Speaking about concerns that government doesn't have enough money to adequately run social programs, Ellison said, "The bottom line is we're not broke, there's plenty of money, it's just the government doesn't have it."
[jump] He then used that observation as part of an argument on behalf of his Inclusive Property Act, a measure that would levy a sales tax on the trading of stocks, bonds, and derivatives. According to CSN News, Ellison estimates it would generate $300 billion in revenues annually.
"People like, George Soros, Bill Gates, Warren Buffett, Paul Krugman, Joe Stiglitz, Jeffrey Sax, Dean Baker, Robert Poland, Larry Summers have said they all support a transaction tax," Ellison said. "The government has a right, the government and the people of the United States have a right to run the programs of the United States. Health, welfare, housing -- all these things."
Here's the video:
During an appearance on Gregg Jarrett's Fox News show earlier this week, Republican strategist Tony Sayegh blasted Ellison's remarks as representing "a radical view of progressives who believe that the American people are indentured servants to the state... literally he thinks we should be an ATM machine for government programs."
"You get the clear sense that he thinks that your hard-earned wages are literally government property and folks in Washington can reach into your pocket and grab more of it anytime they want," Jarrett replied.
But as a Media Matters post points out, plenty of reputable economists support a transaction tax, including the New York Times' Paul Krugman. Here's an excerpt from his November 27, 2011 column entitled, "Things to Tax":
And then there's the idea of taxing financial transactions, which have exploded in recent decades. The economic value of all this trading is dubious at best. In fact, there's considerable evidence suggesting that too much trading is going on. Still, nobody is proposing a punitive tax. On the table, instead, are proposals like the one recently made by Senator Tom Harkin and Representative Peter DeFazio for a tiny fee on financial transactions.-- Follow Aaron Rupar on Twitter at @atrupar. Got a tip? Drop him a line at [email protected]
And here's the thing: Because there are so many transactions, such a fee could yield several hundred billion dollars in revenue over the next decade. Again, this compares favorably with the savings from many of the harsh spending cuts being proposed in the name of fiscal responsibility.
But wouldn't such a tax hurt economic growth? As I said, the evidence suggests not -- if anything, it suggests that to the extent that taxing financial transactions reduces the volume of wheeling and dealing, that would be a good thing.