The worst of the recession appears to be over. Stock markets are regaining the faith of investors. The climate for companies seeking to raise capital is warming up, kindling hopes that new jobs are on the horizon.
But Democrats aren't inclined to wait for the free-market economy to get back into gear -- there's an election next year, after all. So if Wall Street is even part-way back on its feet, naturally, it's time to tax the heck of out it.
Reps. Peter DeFazio, D-Ore., and Ed Perlmutter, D-Colo., are drafting a bill that would slap a 0.25 percent tax on the sale and purchase of financial instruments such as stocks and securities. They estimate it would add about $150 billion a year to the Treasury. They call this crazy idea the "Let Wall Street Pay for the Restoration of Main Street Act of 2009."
In the Democrats' world, Wall Street financiers exist in a bubble, where their considerable assets never escape to circulate in the broader economy. In reality, Wall Street props up Main Street every day by allowing investors to back promising ventures and well-run companies -- voluntarily.
Reps. DeFazio and Perlmutter want to seize enough cash each year to build 17 CityCenters, or fund California's insolvent government for 12 months. They'd put half their annual take in a "Job Creation Reserve" -- never mind what happens to those artificial, "targeted" jobs when taxpayer subsidies go away -- and apply the other half toward reducing the federal budget deficit. At Washington's current rate, $75 billion would cover less than two weeks of deficit spending.
Congress should be encouraging investment in the United States, not scaring it away. A new tax on stock trades would make American opportunities less attractive in the global marketplace and make it far more expensive for fund managers to get returns for their shareholders.
At a time when there's no shortage of bad ideas in Washington, this one ranks among the worst. The notion that debt-addicted congressmen can create as many sustainable jobs in as short a time as the private sector is laughable.