Sec. 2. Findings
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Congress finds the following: The global financial crisis cost Americans $19 trillion in lost wealth. The global financial crisis was caused by financial firms taking great financial risks without disclosing those risks to their investors or their regulators, and by regulatory failures to adequately police the financial services markets for crime, unfair or deceptive practices, fraud, lack of transparency, and mismanagement. Deceptive, illegal, and speculative financial practices have harmed public confidence in the integrity and fairness of many United States financial institutions, and threaten the basic strengths of the United States economic system.
American citizens provided the money to stabilize the financial sector, making $700 billion available to 800 financial institutions, automakers, and insurance companies. The global financial crisis, along with the wars, unabated and unaddressed climate change, unsustainable tax cuts, and a continuing unemployment crisis, if unaddressed, will deprive a generation of a meaningful role in the larger economy. Nurses, teachers, public safety officers, and other public sector workers have faced drastic funding cuts, harming our long-term public safety and prospects for economic growth.
Extreme weather events rooted in climate change, including flood, drought, fire, super storms like Sandy, as well as slow-onset events like sea level rise, are wreaking havoc in the United States and across the globe resulting in climate change impacts that jeopardize the lives and livelihoods of Americans, causing large-scale food and energy insecurity in developing countries, and extolling untold economic costs. According to economists, a small tax on transfer of ownership of every financial trade could generate hundreds of billions annually in revenue, which when invested could help create millions of good-paying jobs in both the public and private sectors every year, as well as provide urgently needed funding for programs to combat climate change and address global health and development issues.
A transactions tax will help limit high-frequency trading which may be as high as 70 percent of the market and results in declining market stability through extreme price volatility, distorted market prices, and structural vulnerability to speculation far in excess of the liquidity needs of commercial hedgers. A securities transfer tax would have a negligible impact on the average investor. The United States had a transfer tax from 1914 to 1966: The Revenue Act of 1914 (Act of Oct. 22, 1914 (ch. 331, 38 Stat. 745)) levied a 0.02 percent tax on all sales or transfers of stock which was doubled in 1932 to help overcome the budgetary challenges during the Great Depression.
Forty nations have or have had some form of a financial transactions tax; it is endorsed by more than 1,000 economists; and 10 European countries are moving forward on implementing a coordinated financial transactions tax after European Union finance ministers signaled approval in January 2013. Revenue generated by this tax could be available to— create a more dynamic economy and enhance economic opportunity by providing free college education and lessening student debt; strengthen financial security and expand opportunity for low- and moderate-income families, including strengthening the social safety net and expanding resources for child care, Social Security, and savings incentives; expand resources for State and Federal investments that protect our health and environment, investing in water and wastewater infrastructure, rebuild our crumbling physical infrastructure, and create good paying jobs by— expanding and improving Medicare and Medicaid; investing in job training, public sector jobs, and green jobs; providing housing assistance to low-income households; investing in transportation including public mass transit and an infrastructure bank that promotes environmentally responsible domestic manufacturing and construction industries; and protecting our environment and building a clean energy economy, including efforts to combat climate change and build resilience to its effects in the United States and in developing countries; and fund international sustainable prosperity programs such as HIV treatment, research and prevention programs, other international health and humanitarian assistance, and climate change adaptation and mitigation efforts by developing countries.
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