September 26, 2008

Make the bastards pay for their own bailout.

It doesn't take an MBA or degree in economics to figure out that people in the US are pissed off at the possibility that they'll have to shell out hundreds of billions of dollars to bail out the big financial institutions responsible for the current economic disaster. Given this, you'd think that the Dems could come up with a response to the Dubya administration's bailout plan that relieves the average taxpayer from paying the costs of any bailout, wouldn't you? But no. Democratic leaders in Congress are instead settling for minor tweaks to Dubya's bailout—tweaks that leave most of us holding the financial bag.

This magpie isn't a financial genius, but I've been paying attention to proposed solutions that some really smart people are making. Here are some of those ideas:

  1. Put a 0.25% tax on the transfer of stocks, bonds, and other financial instruments. According to estimates I've seen, this could raise US $160 billion each year—enough by itself to pay for a bailout on the scale of what Dubya's administration is proposing. This tax should be made permanent.
  2. For at least five years, put a 10% income tax surcharge on any individual whose pre-tax income is US $500,000 or more.
  3. Instead of lowering the capital gains tax (as proposed by right-wing Republicans), add a 25% surcharge to the existing tax for any individuals whose pre-tax income is US $500,000 or more. This capital gains surcharge should last at least five years.
  4. Lastly, impose a windfall profits tax on the obscene profits being made by the oil industry. No, this isn't directly related to the bailout. It's a good idea, though, and one that would be broadly supported—especially if the proceeds from this tax were used to help taxpayers meet the high cost of heating oil and gasoline.

This 'modest proposal' to the Democrats puts the cost of the bailout on the people and institutions responsible for—and who have reaped financial benefits from—our current economic problems. Just as importantly, it prevents the Republicans from tying Barack Obama and the Democrats to Dubya's unpopular bailout plan.

What do you think?

Posted by Magpie at September 26, 2008 01:02 PM | Economy | Technorati links |
Comments

Sounds good to me...course the sound of rich asshats screaming may deafen half the Western world.

Posted by: Labrys at September 27, 2008 08:58 AM

Of course, the Republicans would be screaming about raising taxes, suggesting that the taxes will land on everybody, as if everybody is making $500,000 per year or more, but I personally would be willing to listen to all the whining and screaming in order to have a deal like this pass.

I hope you've written this to your Senators and rep.

Posted by: Nora at September 27, 2008 07:23 PM