This Simple Tax Increase Would Lower Your Gasoline Costs

When I receive my paycheck next week, I'll have payroll taxes and income taxes taken off the top. When I cash the check and head to Meijer to buy necessities, I will pay taxes on non-food items. When I drive through and get a soda on the way home, I will pay taxes on the soda. When I get home and pay my cell-hone bill, I will pay taxes for phone usage. Yet, when a major investor like Warren Buffett logs into his account and buy $60 million worth of dollar ETF shares

, he pays nothing in taxes. When he takes his gains on the venture, he pays a capital gains tax that is lower than any income tax — even though capital gains would be investors only real sources of income. Does that seem fair, or particularly wise, for the poor to pay a higher percentage of their income in taxes than the wealthy? Does it make sense to tax the daily transactions of Luci the writer but not the daily transactions of the Lords of Wall Street? It makes absolutely zero sense in a world where the federal government is near bankrupt and it is considering eliminating much-needed social safety net programs for the elderly, the sick, and poor children across the country. One way to raise additional funds for the government would be to institute a per-transaction fee on all stock trades. Two years ago, Congress considered legislation to implement a securities transaction tax of 0.25% on every stock trade, which of course is equivalent to 0.5% for each round trip. It was known as H.R. 1068: Let Wall Street Pay for Wall Street's Bailout Act of 2009. I say that number is too low, but it is a good start. In addition to taking on some of the income of the wealthy, the transaction tax would have a second benefit for American consumers: it would reduce the speculation rampant in the commodities market. Right now, speculators have every reason to drive up the price of, say, a barrel of oil. The market tags along, not wanting to be on the wrong side of that trade, and there are few, if any, costs imposed on speculators. A per-transaction tax would make it less profitable for speculators — those who buy paper shares of commodities they never intend to hold, for the sake of driving the price up and then dumping them for a profit — while imposing a minimal cost of doing business on legitimate companies hedging their commodity purchases. We would also see lessened volatility in the market, and reduce the probability of flash crashes, similar to the two that hit the market in the last 14 months.