Securities Transaction Taxes for U.S. Financial Markets

PERI Working Paper No. 20

46 Pages Posted: 14 Jan 2003  

Robert Pollin

University of Massachusetts at Amherst - College of Social and Behavioral Sciences - Department of Economics

Dean Baker

Centre for Economic Policy Research (CEPR); International Labour Organization (ILO) - Policy Integration Department

Marc Schaberg

Independent

Date Written: 2001

Abstract

This paper examines the viability of security transaction excise taxes (STETs) as one policy tool for promoting a more stable financial environment, specifically with respect to the U.S. economy. Contrary to a large recent critical literature, we show that a STET can be designed without creating large distortions between segments of the financial market. We also show that a modest STET for the U.S. - beginning with a 0.5 percent tax on equity trades and scaled appropriately for other financial instruments - would generate substantial new government revenues, on the order of $100 billion per year.

JEL Classification: E47, G38

Suggested Citation

Pollin, Robert and Baker, Dean and Schaberg, Marc, Securities Transaction Taxes for U.S. Financial Markets (2001). PERI Working Paper No. 20. Available at SSRN: https://ssrn.com/abstract=333742 or http://dx.doi.org/10.2139/ssrn.333742

Robert Pollin (Contact Author)

University of Massachusetts at Amherst - College of Social and Behavioral Sciences - Department of Economics ( email )

940 Thompson Hall
Amherst, MA 01003
United States
413-577-0126 (Phone)

Dean Baker

Centre for Economic Policy Research (CEPR) ( email )

1015 18th St., NW, Suite 200
Washington, DC 20036
United States
202-293-5380 (Phone)
202-822-1199 (Fax)

International Labour Organization (ILO) - Policy Integration Department ( email )

4 route des Morillons
Geneva 22, 1211
Switzerland

Marc Schaberg

Independent ( email )

Beverly Hills, 90212
310-552-9269 (Phone)
310-656-6304 (Fax)

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