bonds, CDOs, credit default swaps, credit derivatives, cricketdiane, Economics, Economy, EU budget crisis, financial derivatives, financial products, financing the US debt, fiscal responsibility, paying off the US debt now, Republican budget cuts, stocks, taxpayer dollars, UK budget cuts, US budget cuts, US economic crisis, US Economy, US Government
Today, there are derivatives being created and sold in the hundreds of millions of dollars in value. Today there are financial derivatives and exotic financial instruments being created (manufactured). Today stocks and bonds are being sold, traded. purchased every single minute by the the hundreds of millions of dollars in value. In total, all of it is being swapped, traded, bought, sold and manufactured as well as exported and imported across nations. I would say that in and of itself, starting now – would solve the deficit problems.
And, just as we pay taxes on milk when it is bought, there are other taxes on the suppliers which are paid, on the retailers which are paid, on the properties housing it which are paid, on the truckers that deliver, on the gas they buy to deliver it, on the farms and farmers which produce it and sell it in the first place. So, why in the world wouldn’t these tremendously expensive products being created every minute of every day not be taxed in the same way with the same sales taxes, manufacturing taxes, product taxes, VAT and ad valorem taxes, export and import duties, and state taxes?
Today, there are well over $600 Trillion in credit derivatives, not to mention the other financial products being created, bought, sold and swapped. Out of all of them – every minute of every day, there are sales of these products happening. If I can’t buy a gallon of milk or a gallon of gas without it being taxed, then why can they sell $40 million in stocks without paying sales tax?
Thanks for taking a look at it. I hope we are right. It will solve the problem immediately by simply applying the tax laws that already exist for every other product to them. Retroactively applying the law wouldn’t even be required. It would simply need to be started today, in the same way that every other product, sale, purchase, trade and property and manufactured good is taxed. They can remit those revenues to our Federal government, State governments and other nations’ governments starting today – and the problems are solved. They have accountants – they can do that.
I do want to say one other thing –
The corporations as well as the financial industries like the stock markets and hedge funds have used our infrastructure without fair support of it for long enough. We have had to hire people to inspect them, regulate them, monitor them and generally keep up with their damn shenanigans in every single industry, in every single business and corporation. We paid for the streets they use, the highways that deliver their products, for the utility systems that carry the electricity to them, the communications systems they are using including sending up and repairing the satellites that are orbiting to carry their signals.
We have provided labor, and the oversight of labor, worker safety and workplace safety, food safety so they didn’t end up getting poisoned on the things they were producing or eating. We watched over the restaurants where they eat and supplied the building materials and technology for the buildings they are using. There isn’t one part of what they are doing that tax dollars and the American public (along with its marketplace) haven’t provided. That infrastructure doesn’t come for free. We’ve paid for it – they can now put in their fair share to pay for it. And, I mean, now.
This comment was a response to a comment on my previous blog post which was written a few minutes ago.
And, I want to add this –
In the commodities markets there are speculators who are buying contracts for the purchase of later delivery on goods who are also not paying sales taxes on those physical contracts which represent a notational value in the hundreds of thousands and sometimes, millions of dollars. They don’t pay a fee to play that goes to the state, the government or the nation when they purchase them, sell them or swap them. And, they don’t pay any of various other taxes, import and export duties, either on each of those dollars being spent, traded, swapped, bought in speculative contracts on goods. Those contracts represent a product. It was manufactured. It physically exists. It has a value. It is traded. It is purchased. It is accounted. It is sold.
Therefore, it should have the same taxes applied to it that I would have to pay as a manufacturer of original goods of any kind which must be subjected to any of a number of different taxes, including sales tax, VAT if it is re-sold, state fees and taxes, federal taxes for manufacturing of goods, interstate commerce taxes – and any of a number of other business taxes as in the case of the taxes I would have to pay just to insure any of it on the insurance policies. I pay the phone taxes, the cellphone taxes, taxes on my cable bill – and these jackasses get to trade in billions of dollars in goods without being taxed on every single transaction. I do not think that will work anymore.
Our government debt and interest can be paid off right now by doing it this way, simply apply these tax structures and revenue streams required from the rest of us to the above financial instruments, speculative commodities trading and other business activities of the stock markets and derivatives.
Simple. Done. Solved.
That is – “Sol-ved.”
And immediately yields – Solvency for the US, for the States, for New York State and New York City, for Atlanta and the State of Georgia, for Texas and Ohio, and Chicago – which is in Illinois. It probably won’t do anything to help Wisconsin but they brought that mess on themselves and they need to fix it.
The national budget deficits of the UK, the European Union and every single nation of the European Union can be solved immediately this way. And, that is the goal of these entire budget cutting shenanigans, isn’t it? None of which, I might add – will actually pay off any of the debts nor even come close to paying off the interest on these debts even as they weaken the entire economy, the complete social fabric of these nations (including ours) and gut the existing infrastructure that supports them.
But, to use the plan as I’ve proposed – these budgets can be brought into solvency immediately, their debts completely paid off, the interest due now completely paid, have a healthy prudent reserve to cushion these budgets and no cuts would have to be made whatsoever – in fact, increases to education funding could be provided rather than destroying the opportunities for educating an entire three or four generations of students, children and adults.
Total Public Debt Outstanding (United States March 2011)
(and one penny.)
Plus interest compounded upon interest again compounded upon the debt.
(see chart above on how that works out over 25 years on $1,000 and amplify that times the above numbers. America won’t be in business unless we do this now by taxing fairly everything being produced and sold in America – and the UK – and in the EU – because we are intimately tied together economically and their debt influences us and our debt influences them and all of it influences me and my fellow citizens and our families.)
Now, a note to Washington and our state governments – you’ve mismanaged this mess. You fix it.
Let’s do the math –
What is 20% of $600 Trillion dollars in credit derivatives?
$120 Trillion dollars.