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The legislation"s got some powerful support from economists, Wall Street investors, and consumer groups. Joining us to talk about all of this is Congressman Peter Defazio of Oregon. What kind of tax are we talking about, congressman? Good to have you on tonight. I want you to put it into historical perspective for our audience. This is something that we had back in the early decades of the 1900s. What happened? How did that turn out?
REP. PETER DEFAZIO (D), OREGON: Well, Ed, when we built the greatest industrial power that the world has ever seen, particularly post World War II and World War II, we had this tax in place. It was first enacted in 1916. When we were in deep trouble in the Great Depression, 1934 --
Congress back then had a lot more guts and there were a lot fewer financial services lobbyists working the Hill. They doubled the tax. Wall Street predicted calamity and collapse. Guess what? From the day the tax was passed the stock market only went up, because we were rebuilding the real economy.
They were investing the money that was raised in the WPA and CCC, that built a foundation under the real economy to put Americans back to work. That"s how you create wealth on Wall Street, not trickle-down from the top, not showering money on the speculators and the gamblers, but rebuilding that which benefits all the society and makes us a great power.
So we have experience with it. We know it works. It was allowed to expire in 1966. We want to reinstate it now and split the proceeds, which would be about 150 billion dollars a year, between 75 billion for investment in our crumbling transportation infrastructure, other true job creating activities, and 75 billion to help pay for some of the debt and deficit that"s been created by that collapse generated by Wall Street.
SCHULTZ: To be very clear, this isn"t going to hit the average investor. This is going to be in the multi-trade region. Correct? Those who deal in unbelievable--
DEFAZIO: We exempt the first 100,000 dollars of trades you make a year. That"s most average Americans, or not even average Americans. We exempt retirement accounts, health savings accounts, education accounts. You don"t pay when you go into a mutual fund. So we"re exempting those who are not involved in high-frequency trading.
There are a lot of legitimate investors and financiers out there that say this would be a good idea. This would get some of the fluff, the speculation, all of those dangerous things out of the market, because people are trading a stock 1,000 times a minute, under high volume trading, making a tiny margin. They wouldn"t bother to do that and create the volatility and jack up prices.
SCHULTZ: Is the White House with you? Labor is with you. AFL-CIO is with you.
DEFAZIO: Secretary Geithner has taken a dim view of it. In fact, it was proposed by the prime minister of Great Britain. By the way, they say all our firms will flee to somewhere else. Guess what? In London, they assess a tax that"s twice what we are proposing, and none of the financial firms have left their cushy palaces in London because of the tax. Maybe if we pass the tax, they"ll move to India or some other place that doesn"t assess the tax. I don"t think so. I don"t buy that.
Our tax would follow the trades. If you"re a U.S. citizen or U.S. entity, you have to pay the tax. You can"t escape it unless you want to give up your citizenship and move to some third world country.
SCHULTZ: Congressman, good to have you on tonight. I hope it passes.
We could use 150 billion dollars off Wall Street.
DEFAZIO: We would put it to good use, put real Americans back to work in the real economy.
SCHULTZ: Yes, we would. Thanks so much. One final page in my playbook tonight, believe it or not, I"m going to come to the defense of a psycho talker. That"s right, she"s been on this program a lot. Yesterday at a book signing event at the Mall of America in Minnesota, some bonehead started hurling tomatoes at Sarah Palin. Thirty three year old Jeremy Paul Olson missed Palin by just a few feet and it ended up hitting a police officer. He was arrested on assault and disorderly conduct charges.
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