The Progressive


A project of Common Dreams

For Immediate Release

Alan Barber, (202) 293-5380 x115

Over 200 Economists Voice Support for a Financial Transactions Tax


Over 200 economists, including James K. Galbraith and Dean Baker, have signed a letter in support of a modest set of financial transaction taxes,
which could raise a substantial amount of needed revenue while having
little impact on trades that have a positive economic impact.

The cost of trading financial assets has plummeted over the last three
decades as a result of computerization. This has led to an enormous
explosion in trading volume, with most trades having little economic or
social value and redistributing disproportionate resources to the
financial sector. A set of modest financial transactions taxes, which
would just raise trading costs back to the level of two or three
decades ago, would have very limited impact on trades that have real
economic value.

Such taxes could both reduce the volume of speculation in financial
markets and provide substantial revenue for either important public
purposes and/or deficit reduction. Financial transactions taxes could
be an important part of a reform package that seeks to remake the
financial sector so that it better serves the larger economy.

The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.

(202) 293-5380