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Nurses rally to heal America with Wall Street tax

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nurse_rally_financial_tax.pngNurses will gather across the U.S. on Thursday, Sept. 1 to urge Congress to tax financial transactions and use the revenue to fund social programs desperately needed amid the ongoing economic crisis.

The nationwide event organized by the National Nurses United will include visits to some 60 congressional offices. Earlier this month, NNU sent a letter to all 535 members of the House and Senate asking them to support a tax on trading of stocks, bonds, derivatives, currencies, credit default swaps and futures -- the sort of financial speculation behind the 2008 economic meltdown and resulting recession.

"America's nurses see every day the broad declines in health and living standards that are a direct result of patients and families struggling with lack of jobs, un-payable medical bills, hunger and homelessness," said NNU Co-president Karen Higgins, a registered nurse. "We know where to find the resources to bring them hope and real solutions."

A number of the Sept. 1 events will take place across the South, including Florida, Georgia, Kentucky, Texas and West Virginia. There's also a rally planned outside House Majority Leader Eric Cantor's office in Richmond, Va.

As economics professor Nancy Folbre pointed out last week in the New York Times, speculative purchases of stocks, bonds and other financial instruments are currently untaxed in the U.S. except for a small fee of less than a half-cent on stock trades used to fund the Securities and Exchange Commission:

In Britain, by contrast, a 0.5 percent tax on stock transactions raises about $40 billion a year. President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany recently announced plans to introduce a similar tax in the 27 nations of the European Community.

In the U.S., a financial transactions tax of 0.5 percent would raise an estimated $175 billion in revenue a year -- even if it cut the total number of transactions in half. Proponents also point out that by discouraging short-term trades and
speculation such a tax could reduce price volatility and encourage
long-term investment.

Not surprisingly, Wall Street hates the idea because it would reduce trading profits, while traders worry that it would eliminate some of their jobs.

(Screen grab of nurses rallying for a financial transaction tax from NNU promotional video.)

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re: Nurses rally to heal America with Wall Street tax

Raise $175 billion per year? That is many times more than the profits of the entire financial sector and the national savings rate combined. Britain stamp tax or financial transaction tax raises $40 billion? Rubbish. It's $4 billion before subtracting other revenue losses that the tax creates. Stamp duty abolition would have net efficiency gains to the economy of around $4.9 billion. Who pays the British tax? The cost of the tax is passed down to individuals.

The Canadian government and The Independent Budget Office of New York City have conducted extensive research and find transaction taxes to cause net negative revenue, and substantial economic and job losses. What about pensions and other retirement? The tax will cause competition to decrease and the bid-ask spread and broker fees to increase. The cost of the tax, increased spread, increased fees, etc will cost more than 2 percent yield loss every year. Using a financial calculator, over a working lifetime, a person's retirement account will be reduced by one half in a best case scenario.

A real world example would be Sweden's experiment with a short-lived, broad-based and comprehensive transaction tax. Government bonds for example had a rate of only 0.03 percent. Trading of bonds fell 85 percent the first week, bond futures trading dropped 98 percent, bond options stopped trading entirely. The government could not sell bonds to raise revenue. Businesses could not raise capital to expand and create jobs. Total net revenue from the transaction tax was negative after subtracting loss of revenue in other areas of the economy and job losses that the transaction tax created.

re: Nurses rally to heal America with Wall Street tax

Who on earth is brainwashing your nurses on this economically unsound tax issue? Is it a union? It could be considered highly misleading to encourage economically uninformed people to run around advocating something that in fact would make your country less competitive, shut down many hundreds of thousands of jobs and cause your businesses to leave for more welcoming foreign shores. This widely discredited tax that your innocently unwise nurses are babbling about would be net revenue negative. Which sane leadership anywhere would succumb to what appears to be basket-case Europe's economic advice?
The present US leadership's loathing of success and prosperity is alien to everything that made your country a great nation. The sooner your unions and government understand that you don't help your poor by tearing down your successful, hardworking wealthy and the exponential opportunities they provide for their wider communities, the sooner we will see America return to its rightful place as a great world power.
This particular tax has repeatedly been rejected by wise leaderships across the world. It's a completely nonsensical and potentially damaging thought bubble, peddled by irresponsible proponents.

re: Nurses rally to heal America with Wall Street tax

At least the nurses have banned together and are trying to do some good as is the President of Starbucks to get our Nation back on track. If I had any power as an individual I would do the same. Can Carol and Girl from Asia say the same??? Tell me when to be in Washington, DC to protest the behavior of Congress and ways to provide assistance for the needy. If financial matters in this country do not change, I will be one of the needy.

re: Nurses rally to heal America with Wall Street tax

@NC State Fan
You are right. Doing something extremely destructive, destroying jobs, lives, retirement, and the economy is better than doing nothing at all.
What you want is the government doing far less. During Benjamin Franklin's lifetime, Franklin commented that the unemployment rate was ZERO. There was no such thing as an unemployed person. Prosperity was available to all because the government was extremely limited and not corrupting the economy.

re: Nurses rally to heal America with Wall Street tax

Wow, where do Carol & Asia girl work? For the financial services industry, or for the Republican party? I have never seen such strong responses to a financial transactions tax. Give us a break! These people wrecked our economy! These are the same folks who squawk about the Dodd-Frank bill & the financial restraints it places on the runaway greed that just about destroyed our country. Prosperity can be achieved with government a LOT better than without it!

re: Nurses rally to heal America with Wall Street tax

@PaulP
I am an investor worried about this tax. I can't get disability. My savings and investments are all I have. I have studied this tax for 3 years now and most of you have not heard of it until now, yet you think you know more than the experiences of Sweden and government studies on the FTT. Read my first post again. What is it that you do not understand about it? Everything traded on the exchanges did not contribute to the financial crisis. This type of tax is net revenue negative. It creates economic losses and job losses. Do you understand that?