10 Ways to Bail Out Wall Street (and Main Street) Without Soaking Taxpayers in Debt

[Demeter]

By Chuck Collins and Dedrick Muhammad, AlterNet
Posted on September 25, 2008, Printed on September 26, 2008

http://www.alternet.org/story/100223/



The lion's share of bailout funding should come from the high-finance gamblers and the wealthy CEOs who have so profited from our casino economy...Below is our 10-point program to pay for this broader bailout. This plan would generate $900 billion a year until the costs of the bailout and stimulus program are paid for.

1. A Securities Transaction Tax: $100 Billion

A fair plan to pay for the bailout should include a modest financial transaction tax on the buying and selling of stock and other financial products. A penny on every $4 invested would generate $100 billion a year. Other European countries already tax stock transactions, and these transaction taxes effectively discourage speculation.

2. A Wealth Tax Surcharge on Households with $10 Million: $300 billion

Congress should institute a modest wealth tax surcharge on households with a net worth of more than $10 million. These households currently own and control more than 20 percent of the nation's private wealth. They have realized huge gains from the manipulation of capital markets and the asset bubbles that created the current crisis. A modest surcharge -- no more than 3 percent -- could generate more than $300 billion.

3. A Corporate Minimum Income Tax: $60 Billion

In August, the Government Accountability Office reported that two-thirds of U.S. corporations paid no income taxes between 1998 and 2005. These corporations paid nothing toward our shared expenses of defense, environmental protection, public health and education. Ordinary taxpayers should not be left holding this bag. A minimum corporate income tax should contribute toward the bailout....


MUCH MORE AT LINK!


Chuck Collins is a senior scholar at the Institute for Policy Studies, where he coordinates the Working Group on Extreme Inequality.

Dedrick Muhammad is a senior organizer and research associate at the Institute for Policy Studies and author of "40 Years Later: The Unrealized American Dream." Muhammad is also the "Racial Wealth Divide" coordinator at United for a Fair Economy and co-author of UFE's report "The State of the Dream: Enduring Disparities in Black and White."

[livvy]

1. I sent a short note and link to Krugman.

I thought he might like to take a look at it. I should have sent it off to the Obama campaign as well. I am not the person to judge this piece. Economics is not my strong suit, but it seems like there are some good ideas here.

I will leave it up to others with more expertise to judge the ideas presented.

Interesting read, though. Thanks for posting it.

[aquart]

2. Damn sensible proposals. I knew there had to be another way.

No wonder the White House tried to panic us. There is no need for panic. Just sanity.

[tomp]

8. of course there is another way.

but does anyone think either repubs or dems are going to tax the rich?

[gopbuster]

3. capital gains income faces a mere 15 percent tax rate?

I thought it was 28%


"Instituting a 50 percent tax rate on income over $5 million and a 70 percent rate on income over $10 million"

I would think that one would have difficulty passing

Otherwise, sounds good to me!

[endthewar]

5. Bush lowered it to 15%

[gopbuster]

4. "nonspeculative mortgage programs"

This is what really fries me about this whole thing. With all the talk about "Everyone should own a home and providing every American with a way to home ownership." Nonspeculative mortgage programs and loan structures should have been put in place originally.

What would have been wrong with government programs with 40 and 50 year low interest fixed notes for lower income families. They weren't really serious about providing an avenue for every American to own a home, only about their own greedy selves.

[Waiting For Everyman]

14. Totally agree!

And yes, as many people as possible owning a home (responsibly!) is good public policy. We did such accessible, stable financing programs before, there's no reason why it can't be done properly again, and it's urgent that we do this.

Same thing for primary cars. There should be some kind of buydown or reform of credit scores to allow working, responsible people to have transportation without being GOUGED as it is now.

As it is now, it's no different than if one person is charged twice as much on a sticker price or in a store, than another person. It's like making the sale price for a car $15K to one person and $30K for the same thing to another person. That is just wrong!!! What if one person had to pay $4 for a gallon of milk, but another was charged $8? Who would be the poor person? And then to blame the one who can't pay twice as much on less income than the one who got the great deal, is ridiculous and arrogant. That is no kind of level playing field.

And what happened to a discount for paying in cash? All discounts go to credit card payments - justify that somehow.

All of these credit transactions and rules really need changing drastically. This is no kind of fair system we're being evaluated in. And then the cost of all big-ticket necessities is determined by it. This is nothing but a massive con game. All of these laws were written by the bank lobbyists to totally take advantage of people, and soak them for money they should never have owed to begin with.

The non-rich have been effectively blackballed by the credit system for a long time. It isn't such a big deal about credit cards (they're a blight anyway) but big necessities cannot continue to be nothing but an opportunity to rob people, and then permanenetly classify them into a "pay twice as much for life" tier. That is what has happened, and it's dead wrong.

[Hestia]

6. Did ya'll see Frank and Shelby on CBS Early Morning Show?

Shelby held in his hand the article that 200 economics has signed, saying that a bailout was unnecessary, that there are other avenues to explore before handing over $700 billion. Frank was, well, we'll see. I've liked Shelby when I have watched him on C-SPAN, even though, *horrors* he's a Republican, and he's one of the top 20 richest in Congress.

[enuegii]

7. Shelby ran as a Democrat

in 1992 and switched parties immediately afterward because his party's candidate won the presidential election. 'Nuff said about that creep.

[unblock]

9. wealth tax! wow, i've been calling for that for about 30 years, but no one listens to me.

a graduated wealth tax could actually be designed to completely replace the income tax (and i'd love to get rid of the payroll tax as well) with HUGE benefits.

the obvious is redistribution, but that's not fashionable to discuss, even if it's clearly needed and appropriate.

but better, it creates incentives to produce in the economy. labor is tax free, that gives people an incentive to work. investing is tax free, that gives people an incentive to work. hoarding is taxed, that gives people a disincentive to hoard. these are all the right incentives.

very challenging to make happen, politically, in this protect-the-wealthy country, but theoretically wonderful.

[Danascot]

10. Guarantee that mortgages wouldn't default

The basis for the credit problem is fear of massive mortgage defaults. A big part of the solution would be to prevent defaults and foreclosures in the first place.

1. Require banks (or other mortgage holders) to set adjustable and other abusive mortgages at reasonable rates that homeowners can afford. Then the homeowner doesn't default and the bank still collects a fair but not excessive payback on their loan.

2. Work with homeowners who are having difficulty making their payments. Many can make payments if 1. is implemented and they get credit counseling, budgeting advice and the like. If it is determined that the homeowner had no business being in the transaction in the first place, make arrangements to get them out of the deal without default, bankruptcy or other punitive measures, and give them assistance to find affordable housing and manage their money.

Even if this turned out to be a massive effort surely the cost would be a fraction of the $700 billion robbery currently being bandied about that does nothing to prevent defaults.

[liberalla]

11. bookmarking to read later

:kick:

[paparush]

12. Corporate Tax Loopholes have got to go!

Its criminal.

[Joe Chi Minh]

13. Why such modest levies, for crying out loud? If these figures were doubled,

I'd be surprised if they'd make much of a dent on their inordinate gains. Surely, it's time to stop being apologetic about reining in the bandits.

[Shallah Kali]

15. Too many people have delusions of impending wealth and so oppose taxing the rich

I can only this as I have encountered so many people who oppose taxes like these - and many don't even qualify as middle class much less mega-wealthy!

:wtf: