Tax the Wall Street casino

John Fullerton, former managing director at JP Morgan, speaking in support of a financial speculation tax.

Leaders from business and finance are stepping forward to support a financial speculation tax, a modest levy on the purchase and sale of stocks, bonds, derivatives, and swaps.  England and Taiwan have such taxes on securities that encourage productive investment and discourage reckless trading behavior.

Leaders in the U.S. Congress have introduced a proposal to collect a penny on every four dollars of financial transactions. This would raise an estimated $177 billion a year.

Wealth for the Common Good has initiated a campaign of business leaders and investors who support the tax. John Bogle, the founder of Vanguard Mutual Fund, supports the tax as “a way to slow the rampant speculation that has created such havoc in our financial markets, but also for its revenue-raising potential in this time of staggering government deficits.”

A financial speculation tax discourage the short-term investment outlook that lay at the heart of the financial crisis. “We have lost the distinction between real investment in the real economy and short-term speculation,” said John Fullerton, a former JP Morgan Managing Director. “A financial transactions tax should, at the margin, shift investment horizons out to longer holding periods by making high turnover trading strategies marginally less profitable.”

As President Obama heads to Toronto on June 26th for the Summit of the G-20 leaders, he’s going to find lots of other presidents asking about the F.S.T.  German Chancellor Angela Merkel and French President Nicolas Sarkozy have renewed calls for a financial speculation tax. Sign our petition and join the call.

For more information, see the new report from the Institute for Policy Studies, Taxing the Wall Street Casino. You can also read Andrew Ross Sorkin’s Dealbook, in yesterday’s New York Times about our push for a financial speculation tax.