Jack Lew Hearing Puts Spotlight on Wall Street as Main Street Has Yet to Recover
Wall Street Must Pay Its Fair Share, Critics Charge
U.S. Robin Hood Tax Campaign Calls for Passage of “Inclusive Prosperity Act” – Wall Street sales tax; goal to rebuild communities, for real economy
Washington, D.C. – Community, labor and healthcare activists are calling upon the Senate Finance Committee this week to press Treasury Secretary nominee Jack Lew to support a Financial Transaction, or Robin Hood, tax. The Robin Hood tax will begin to bring much needed fairness to the tax code, put the brakes on reckless Wall Street trading, and hold Wall Street accountable to the many communities still suffering from the crashing of the economy.
More than $700 billion in taxpayer money went to bail out banks. But that’s the least of what banks and financial institutions received. According to an audit carried out by the Federal Reserve, $26 trillion additional sums were loaned, granted or guaranteed by the U.S. government, bringing the total bailout to close to an astronomic $27 trillion.
The result has been record profits for Wall Street. Just last year the top six U.S. banks raked in $63 billion – with Bank of America pulling in more than Walt Disney and McDonalds combined. At the same time, American families and communities continue to struggle with severe economic hardship. Unfortunately, many politicians in Washington are proposing the opposite of what's needed by calling for cuts to crucial safety net programs as well as our earned benefits, like Social Security. The real answer is to invest in our country and our citizens.
“We need a Treasury Secretary – and for the government overall -- to realize and act on the fact that the money we need to get our country on track isn’t in grandma’s purse or in the backpacks of our children,” said Liz Ryan Murray of National People’s Action. “It’s high time Wall Street paid their fair share and the Robin Hood tax is the best way to start. We want to hear that Jack Lew understands the problems and supports the solution.”
Lew, who is White House Chief of Staff, worked at Citigroup before joining the Obama Administration. In the Wall Street bailout, the U.S. government guaranteed $300 billion in bad Citibank assets, invoking a “too-big-to-fail” rationale. That bank also paid no taxes. “Citigroup has paid no federal income taxes for the last four years after receiving a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis,” wrote Sen. Bernie Sanders last week.
National People’s Action is one of more than 125 organizations that make up the U.S. Robin Hood Tax Campaign. Labor unions, consumer groups, small businesses, religious organizations, healthcare advocates and others, with total memberships in the millions, have endorsed Robin Hood’s call for a small sales tax on Wall Street speculative trading. A sales tax of 50 cents per $100 on stock trades, lower rates on bonds, derivatives and currencies, would provide up to $350 billion a year in revenue.
The financial tax is embodied in the Inclusive Prosperity Act, sponsored by Rep. Keith Ellison (D-MN). Some form of financial tax already exists in 40 countries, including at all the major world exchanges. The tax also serves to stabilize markets by limiting high-speed, high-volume trades and by containing price spikes in essentials, like food and gas, tied to speculative trading.
The Robin Hood Tax Campaign looks forward to Mr. Lew joining with scores of leading economists and the numerous countries from around the world in calling for and implementing a financial transaction tax.
Signs of crisis are everywhere in the U.S. Nearly one in four American children suffered food insecurity at some time during the last year. Official U.S. poverty is approaching 50 million. More than 22 million adult Americans do not have full-time jobs. A three-year decline in longevity for older, pre-retirement Americans was reported this month as a result of enduring unemployment, poverty and lack of access to healthcare.
The goal of the Wall Street tax revenue is to stop these dangerous declines and to move towards a real recovery. Robin Hood supports the creation of jobs at living wages, retirement for all with dignity, quality education and healthcare, attention to the environment and rebuilding of infrastructure. The tax would also be directed to international commitments in research and treatment of HIV/AIDS and for climate control.