[tophcfa]

Originally Posted by blueash

A modest proposal. As the Covid crisis continues there will be more rescue bills coming to help individuals and businesses. At the same time, income into the treasury is dropping as income and sales taxes and import taxes all decrease. The trillions of new debt have not been offset by any decreases in spending, domestic or military. So other than leaving the bills for our grandchildren, is there any way to perhaps repay our government, which is ourselves?

According the World Bank, the value of stocks traded in the US in 2018 was

33,027,245,670,000

Round that off to 33 trillion. I propose a stock trade tax of two tenths of one percent. That means you will pay 2 pennies in tax for every 10 dollars in value you trade. Considering that recently the market goes up and down several percent daily, a 0.2% difference is tiny.
If you sell one million in stock value, you pay a tax of two thousand dollars. Not much of a hit. You pay 7% to sell your house to the agent.

Here's the great part. 33 trillion in sales times 0.2 percent generates 66 billion in tax revenue. Keep in mind of course that this is doubled as the buyer also has a stock trade tax of the same amount. So 132 billion in tax revenue per year.

It won't pay off the debt entirely, but it is a nice dent. It covers nearly 1/3 of the Federal interest payments on the debt. Make the tax 1% and you totally cover the interest on the debt and begin to reduce the principle. Can we ask our stock traders to pay 1% for this national emergency? Or do we leave it for our grandchildren?

It wound not be the stock traders that pay this tax, it would be the investors as the trading tax will be passed through. Everyones 401k plan that holds mutual funds owing stocks will be taking the hit. In non 401k/IRA accounts, money that people have invested in stocks was already taxed as income before it was invested.