On May 19, 2015, Senator Bernie Sanders introduced the Robin Hood tax bill that would tax stock market trades on sales involvign stocks, bonds, derivatives, and other financial instruments in order to generate enough revenue to make all public colleges and universities tuition and fee free.
Is this a crazy idea?
Using elementary arithmetic, based on documented public domain data, we’ll not only prove that this is achievable, but far more benefits to all of society are possible (see free postal service example below).
We first note the fact that in 2013, the stock transaction volume was $43 TRILLION.
Free Tuition/Fees for All Public Higher Education Students (Over 20 Million Students Enrolled)
The 2012-13 Digest of Education Statistics report states that the tuition/fee revenue source was $68.1 billion ($58.6 B for the 689 public 4-year institutions and $9.5 B for the 934 2-year public institutions). Dividing $68.1 billion by $43 trillion yields 0.158%. Thus, if the buyer and seller in every transaction split the cost, each would pay ONLY 7.9 cents per $100 of transaction value to generate the revenue needed to make higher education tuition/fee FREE!
Free US Postal Service (USPS) for Everyone
Annually (2014), the total USPS operating expense (employee salaries, pensions, healthcare costs, vehicle and equipment purchase and maintenance, fuel costs, etc.) is $73.2 billion. This amount, divided by $43 trillion yields 0.17%. As above, the buyer and seller each would pay ONLY 8.5 cents per $100 of transaction value in order to get the $73.178 billion!
Therefore, 7.9 + 8.5 = 16.4 cents per $100 charged to the buyer and seller of every stock transaction, every student goes to college tuition/fee free and everyone in the country uses the postal service for free!
The bottom 49% income group owns no stocks and never trades on the stock market. The top 10% income group makes over 90% of all stock market transactions, and the 50th to 90th percentile income group makes less than 10% of all stock market transactions. This system of generating revenue, therefore, clearly poses no financial hardship on the top 10% because the amount that would be taxed is so minuscule, and poses no hardship whatsoever for the bottom 90%.
Thank you, Senator Sanders, for proposing the Robin Hood tax. It easily enables the creation of revenues for supporting indispensable programs that enrich the lives of hundreds of millions.
The richest 10%, no doubt, would be elated to help so many by sharing in this eminently just Robin Hood system.
“Taxes, after all, are dues that we pay for the privileges of membership in an organized society.” —Franklin Delano Roosevelt.
John M. Bachar, Jr.