A reader asks:
Why has nobody proposed paying for health care expansion through a securities transaction tax? Most of the proposals estimate the cost to be between $100-150B, Dean Baker says that a securities transaction tax could raise about that amount, year in and year out, without being too large or distorting for Wall Street.
But of course, nobody, save for perhaps Baker himself, is proposing this as a reason to pay for expansion. Why is that? Is it because it’s a tax without a strong chance of staying put, and thus people don’t want to devote a shaky (in the sense of being politically questionable) revenue source to something so important? Is it that there’s really more to the economics than some people have suggested? I find that hard to believe, since Larry Summer was seemingly open to the idea in the late 1980s/early 1990s.
To me, this seems like a no brainer. We have a good, seemingly economically sound way to pay for expansion, with the added benefit of possibly using populist anger at Wall Street as a way to make it easy to pass it through Congress. There has to be some reason why nobody proposing this, other than the possibility that the Democrats are in the pockets of Wall Street just as much as the critics in and out of the part say they are.
Good question. Does anyone have an answer to suggest?
I have a related suggestion: if Waxman-Markey dies or gets hopelessly watered down in the Senate, stick a greenhouse-gas tax on the health bill in conference.