Testimony from Health GAP's Jennifer Flynn at Congressmember Ellison's Inclusive Prosperity Act Reintroduction
Good morning! My name is Jennifer Flynn and I am the Managing Director of Health GAP, an international AIDS advocacy organization dedicated to eliminating the barriers to lifesaving HIV treatment for all people around the world. Thank you for this opportunity to speak and thank you to Congressmember Ellison and to Congressmember Lee the Chair of the HIV/AIDS Caucus and a fierce AIDS activist.
What I love about Congressmember Ellison’s bill, besides the $350 billion that it will bring into the public sector to spend on the things we all need, is the name-the Inclusive Prosperity Act! This includes all of us!
For far too long, people living with AIDS have been stigmatized and shunned. People living with AIDS have faced drastic budget cuts at the federal, state and local levels stripping away much needed services.
Despite the budget cuts, there is hope. We now know, that we can end the AIDS pandemic, literally never have to worry about AIDS again, within the next 30 years if we simply increase, very slightly, the amount of money going towards getting people onto treatment and to maintain prevention and services.
With less than $2 billion a year from the Robin Hood Tax, within the next 25-30 years, we will actually have brought about an end to the AIDS pandemic for everyone, around the world.
How could we not pass this tiny tax on big banks. How could we not move this money from the silk lined pockets of Wall Street to our schools, to our hospitals. How could we not implement this tax on Wall Street COMPANIES so that we can have jobs and so that we can end AIDS.
No More Budget Cuts on OUR Backs. End AIDS with the Robin Hood Tax! #HR1579, #rht, @healthgap, @fightGlobalAIDS, @robinhoodtax
SGAC COORDINATOR AMIRAH SEQUEIRA, HEALTH GAP'S JENNIFER FLYNN,
CONGRESSMEMBER KEITH ELLISION AND ROBERT TOLBERT FROM VOCAL-NY
Washington, D.C. – Today, Congresswoman Barbara Lee (D-CA) issued the following statement at a press conference on the Financial Transaction Tax Bill:
“I want to thank Congressman Keith Ellison for his remarkable work on this important legislation and for his excellent leadership of the Progressive Caucus. Let me also thank all the incredible advocates here today and across the nation who have been organizing and working on this bill including National Nurses United. Thanks for beating the drum!
“It is long past time for Wall Street to pay a financial transaction tax like they did in the 1950’s and 60’s when both the economy and the middle class were growing. More recently though, Wall Street traders gambled the economic future of our entire economy and then they were bailed out by the American people.
“Their out-of-control tactics spread across the world and nearly collapsed the global economy. A small tax on financial transactions will help bring some much-needed fairness to a system that can easily absorb it.
“Not only do we need the revenue from this small tax to make critical investments in the economic future of all Americans, but specifically, revenue from this tax would also go a long way to increasing our health and development assistance, including securing AIDS medications for the millions of people who still wait in line for access.
“It's past time for Wall Street to pay their fair share.
“Again, thank you Mr. Ellison for your leadership on this critical issue and I hope that all my colleagues will join us in support of this critical legislation.”
WASHINGTON –Rep. Keith Ellison (D-MN), Co-Chair of the Congressional Progressive Caucus and Chief Deputy Whip, reintroduced the Inclusive Prosperity Act (H.R. 1579) today, which adds a tax of a fraction of a percent on transactions done by Wall Street firms and stock traders. Ellison was joined by leaders of National Nurses United, former Goldman Sachs investment banker Wallace Turbeville, Friends of the Earth President Erich Pica, and activists George Goehl and Jennifer Flynn.
“A lot of people in Washington like to talk about reducing the debt and deficits. Well if you really care about reducing the deficit, how about asking Wall Street speculators to pay their fair share?” Ellison said. “This bill will add a tax of a fraction of a percent on transactions made by the same Wall Street firms and stock traders who crashed our economy in 2008. This tax alone will generate up to $300 billion a year in revenue, stabilizing the deficit and allowing us to invest in the things that matter—education, roads and bridges, and health care for our seniors and veterans.”
The tax would reduce harmful financial market speculation, discourage high-volume, high-speed trading, and slow down the proliferation of ever more complex derivatives.
In 2011, 40 countries had a similar tax, as did the U.S. until 1966. A financial transaction tax has been recommended by business leaders and economists including Bill Gates, Warren Buffett, Paul Krugman, Joseph Stiglitz, Jeffrey Sachs, Robert Pollin, and Larry Summers. After the 1987 Wall Street crash, a financial transaction tax was endorsed by Bob Dole and President George H.W. Bush.
You can find photos from the press conference here.
Posted Apr. 11, 2013 / Posted by: Karen Orenstein, Friends of the Earth
Though a number of wealthy countries attending a State Department-convened climate finance ministerial meeting on mobilizing private money have been trying to escape their obligation to use public funds to help the world’s poor confront the climate crisis (which, incidentally, the poor did not cause), Robin Hood found them today and demanded to be heard. He and his many supporters stood outside the hotel where the elite group had gathered in Washington, D.C. and loudly called for the implementation of a Robin Hood Tax (a.k.a. financial transaction tax), an extremely promising, untapped source of revenue that would raise hundreds of billions of dollars to create jobs; provide education, housing and global healthcare; and fight climate change.
Passers-by witnessed an epic tug-of-war between people and the planet on one side, and big banks on the other. It was the walruses, polar bears, Robin Hood and ordinary folks versus the fat cat bankers. They were struggling over a tiny tax on big banks, symbolized by a giant penny.
According to a spokesperson representing Wall Street and City of London tycoons standing on the right side of the rope, “If I lose the money, I will not be able to fly in my private jet. Oh wait, that’s not true. I will still have enough money to fly in my jet. I might make way less money! Oh wait, actually there’s no data to back that up. I will not be able to afford healthcare! Oh wait, actually if there was a Robin Hood Tax, healthcare would be affordable for everyone. Well, dammit, I just don’t want to give up any of my pennies!”
At which point, Robin Hood retorted, “But, Banker, the Robin Hood Tax is waaaayyyy less than a penny!”
Mr. Hood was correct. At no more than half-a-penny, the Robin Hood Tax is a micro-tax on Wall Street trading that would curb harmful speculation and raise hundreds of billions of dollars of new revenue to pay for urgently-needed public goods and services, like helping the poor cope with the threats to public health and food shortages caused by our changing climate. It would simply levy a teeny tiny fee on financial transactions—most of which are traded not by people, but by computers in a matter of micro-seconds—involving stocks, bonds, currency exchanges and derivatives. As Robin Hood likes to say, “It’s small change for the banks but big change for the people.”
Throughout the tug-of-war, Robin Hood’s supporters – even those of the animal kingdom – could be heard chanting:
No more budget cuts on our backs;
Fight climate change with a Robin Hood Tax!
Public money’s good,
Says Robin Hood;
Robin Hood Tax now!
As they dispersed, Robin Hood’s supporters expressed cautious optimism that their message was well-received. After all , they had interacted with ministry representatives from the U.S., U.K., Poland, Japan, Canada and Norway. Norway’s representative even joined in the fun to show his support for Robin Hood.
Rather than focusing on how to guarantee high returns for Wall Street and the City of London, the U.S. and other countries should finally start taxing them to help pay for global public goods and services, like meeting the adaptation and mitigation needs of ordinary people in developing countries, especially the poorest and most vulnerable.
One has to wonder if Paul Schott Stevens’ “Don’t enact financial transaction taxes,” December 20, 2012, is more about protecting the turf of billion dollar Wall Street banks and enormous investment firms, including their lucrative mutual fund businesses, than protecting the average people who invest and save.
In his column, Stevens argues against the enactment of a financial transaction tax (FTT) in the U.S., as follows: “[A]ny benefits … would be dwarfed by the harm it would inflict on America’s savers, particularly its 90 million mutual fund shareholders.” Stevens is president and CEO, Investment Company Institute (ICI), a trade association comprised of more than 7,500 mutual funds, with names like Wells Fargo CoreBuilder and Morgan Stanley Global, as well as other investment entities.
What’s raised Stevens’ ire of late is legislation introduced in Congress in September by Rep. Keith Ellison (D-Minn.), H.R. 6411, “The Inclusive Prosperity Act,” an FTT now with 16 co-sponsors and the backing of the Robin Hood Tax Campaign, a coalition in the U.S. of more than 125 labor, religious, consumer, health advocacy and other groups, with combined memberships in the many millions.
Scores of leading economists and businessmen support passage of an FTT, as they, too, see it as a legitimate way to raise revenue. Backers include Bill Gates, Warren Buffett, David Stockman, Nobel Prize-winning economists Joseph Stiglitz and Paul Krugman, to name several.
The fact is that for the majority of Americans Ellison’s FTT should cost nothing, hence Stevens’ principal contention that FTTs “will produce a constant drag on shareholder returns… [and] make it all the harder for fund investors to achieve retirement security and other goals” is very misleading.
HR 6411 is a tiny tax; it is 50 cents per $100 on stock trades - that’s $50 on a stock trade of $10,000 - and even lesser rates on bonds, derivatives and currency dealings. Here’s what’s critical, and conspicuously absent from Stevens’ column: the facility or broker is levied the tax, not the investor. Thus Stevens’ argument that an FTT constitutes double, triple, even quadruple taxation is way off base.
Here’s the rub for investors: The sales tax is paid by the investor only if the mutual fund passes it along. We would urge the mutual funds Stevens represents not to pass along this small sales tax to the very savers whose interests Stevens says he seeks to guard.
The point here is that mutual fund profits are more than ample to absorb this very tiny tax. Just look at the billions in wealth gathered by top mutual fund managers. According to Forbes, Fidelity Investments’ chairman is worth $11 billion; Charles Schwab’s wealth is approaching $5 billion, some attributable to fund activity; and Charles Johnson, chairman of Franklin Resources, has made $4 billion from his mutual fund business.
As a final protection to investors, per the Ellison law Americans with incomes of up to $50,000, $75,000 for households, would be rebated any FTT paid. We do not share Stevens’ concern that a tax rebate is an unworkable administrative burden, as credits and rebates are hardly new concepts.
Stevens’ worries extend overseas, where the European Commission, he points out, is moving forward on a unified FTT scheme, with the support of 11 member countries. Forty countries now have some FTT in place. As for the U.K. and its decision to stay out of the EC scheme, we would reiterate that a tax on stock trades – the Stamp Tax - is in place in that nation and the London Stock Exchange remains one of the biggest in the world — even with an FTT on stock transactions.
A unified scheme in Europe and around the world, at all the major exchanges, avoids capital flight. So when Stevens raises that issue in the context of Sweden a generation ago, he seems behind the times.
In France, cautions Stevens, “large players are able to skirt the tax using an array of techniques, leaving small investors to bear the burden.” Unlike many taxes, Ellison’s proposal is difficult to evade because the tax is collected at the point of transaction and title is withheld until marked paid. With automation, trades are easy to track and tax collected.
Stevens shares our concern that “high frequency trading” needs regulation, but he believes an FTT “seems an awfully blunt tool for achieving that goal.” But the same top economists who support the FTT cite its usefulness in helping curb these destabilizing trading practices.
By one estimate, for every gallon of gasoline purchased in the U.S. today, $1 of cost can be attributed to speculative activity in the markets. We think that’s a national shame. An FTT can help to lower levels of speculative trading, according to numerous studies.
To the millions of Americans who are members of organizations calling for an FTT, some of whom are also mutual fund investors, the Ellison bill’s goal of raising an expected $350 billion annually serves an overwhelming national need. The FTT would expand state and federal investments in communities still very much experiencing harm from the 2008 financial collapse. The Inclusive Prosperity Act identifies job creation, the rebuilding of infrastructure, investment in transportation, education and healthcare, and environmental protection among its goals. It would also direct funds to international research and treatment of HIV/AIDS and to address climate change.
FTT supporters believe there is no time to delay, as the enduring harm faced by countless communities drags America deeper into poverty and forestalls a real recovery.
Given the amounts our Treasury expended on Wall Street bailouts, not to mention substantial profits racked up in the finance sector today, an FTT at these small rates and under these well-defined conditions seems eminently fair. Wall Street’s debt to Main Street is past due.
Jennifer Flynn is managing director, Health GAP, a founding member of the U.S. Robin Hood Tax Campaign.