To Generate Revenue, Tax the Casino

CHUCK COLLINS
Collins is senior scholar at the Institute for Policy Studies, where he coordinates the Working Group on Extreme Inequality. He wrote the piece "A Fair Plan to Pay for Economic Recovery," which states: "The corporations that rigged the casino economy and the wealthy CEOs and investors that profited at everyone else's expense should bear the recovery costs, not our kids and grandchildren."

Among Collins' specific proposals:
"Institute a Financial Transactions Tax. Congress should levy a tax on financial transactions such as sale and purchase of stock and more exotic transactions such as credit default swaps, options, and futures. The UK has a modest financial transaction tax of 0.25 percent, a penny on every $4 invested. This is negligible for a long-term investor, but imposes a cost on the fast-buck flippers. Estimated annual revenue: $100 billion. ...

"Eliminate the Tax Preference for Capital Gains. Wealth extracted from Wall Street windfalls will pay out income for years to come. There's no economic reason for taxing income from corporate dividends and capital gains at 15 percent while taxing income from actual work at 35 percent. Taxing wealth and work at the same rates would generate $95 billion a year in revenue. ...

"Eliminate Taxpayer Subsidies for Excessive CEO Pay. Five loopholes that benefit top executives should be abolished. These include eliminating offshore deferred compensation, capping the tax deductibility of excessive pay and eliminating double standards for stock option accounting. Closing these tax loopholes would generate $20 billion a year. ...

"Close Offshore Corporate Tax Havens. Congress should prevent corporations from playing games by claiming expenses in the United States and profits in countries that don't collect taxes. According to the Government Accountability Office, two-thirds of U.S. corporations paid no corporate income tax between 1998 and 2005. Closing this loophole would generate over $100 billion."

Collins' books include Robin Hood Was Right and, with William H. Gates Sr., Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes.