We’re told that these are lean times. The United States no longer can afford to guarantee a secure retirement for the elderly, safety-net supports for low-income Americans nor assistance to impoverished nations, the message goes.
But as people of faith, we believe in a God of abundance. And as we look around, we see incredible riches in our midst.
Consider the concentration of wealth on Wall Street, even following the Great Recession: In 2010, the assets of the six largest U.S. banks equaled 62% of U.S. gross domestic product – up from 18% in 1995, according to members of the Senate Banking Committee.
What if the United States implemented a tiny tax on the most risky, high-volume transactions in this financial sector?
This type of tax has been recommended by the Vatican’s Pontifical Council for Justice and Peace, which has called on governments “to consider…taxation measures on financial transactions through fair but modulated rates with charges proportionate to the complexity of the operations, especially those made on the ‘secondary’ market.”
Pope Benedict XVI also prophetically taught in his encyclical Caritas in Veritate that “economic growth has been and continues to be weighed down by malfunctions and dramatic problems. The technical forces in play…the damaging effects on the real economy of badly managed and largely speculative financial dealing…leads us today to reflect on the measures that would be necessary to provide a solution.”
Such a solution is being proposed in the U.S. the form of a financial transaction tax (FTT) of less than 0.5% on the buying and selling of stocks, bonds, derivatives, futures, options and currencies. Some economists estimate it could generate hundreds of billions of dollars each year.
On April 17, two days after Tax Day, Rep. Keith Ellison (D-MN) will reintroduce a bill which is being called a tax for the people, rather than on the people. The bill would create tax on transactions over $300,000, ensuring that low- and middle-income households would not be impacted. Those who would be affected are a new type of investor called high frequency traders. These traders use complex computer programs to buy and sell thousands or even millions of times every second.
The FTT would not only raise lots of money. It also could slow down such high-volume trading, which has had destabilizing effects that played a role in the recent recession, foreclosure crises, unemployment rates, and government bailout money. Around the world, this type of trading has played a role in food price spikes, resulting in starvation and conflict.
Dozens of faith groups have signed onto a coalition promoting the FTT called the Robin Hood Campaign. For Catholics, the campaign’s name evokes not theft from individuals but a conviction to uphold the priority for the poor and marginalized by addressing a core set of habits contributing to the increasing inequity between the rich and poor.
The Scriptures speak out against excessive accumulation of wealth. When the Israelites wandered the desert, the manna provided to them lasted only one day: “Everyone had gathered just as much as they needed” (Ex 16:18), and when they collected more than they needed, it began to rot. The Jubilee prescriptions in Lev 25 and elsewhere sought to limit economic inequities through the forgiveness of debts. The Robin Hood Campaign advocates a provision which seeks to limit increasing inequity in society in the spirit of these prescriptions of the Scriptures.
The burden of our nation’s financial problems should not be placed on the most vulnerable through cuts to vital safety net programs. The FTT could help alleviate the financial burden of global crises and contribute to a healthy future for humanity and the planet.
Advocate for the FTT with other faith-based groups here.