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Peter DeFazio Smacks Down Cavuto's Right-Wing Objections To A Stock Transfer Tax

Reported by Guest Blogger - November 5, 2011 -

By Brian

Rep. Peter DeFazio (D-OR) visited Your World on November 2, 2011 to discuss his endorsement of a tax on stock transfers. Cavuto, of course, was horrified and grew more agitated as DeFazio out-argued every right-wing talking point. At one point, DeFazio’s words literally echoed off the walls of Congress as he shouted, “WE NEED JOBS!” He went on to mock the right-wing argument that taxes will impede “job creators.” “Oh, The job creators are doing a great job, aren’t they?” DeFazio rhetorically asked. Cavuto had no answer.

Cavuto revealed his mindset at the start when he asked DeFazio, "Is now the time to try (a stock transfer tax), though?"

DeFazio said it wouldn’t go into effect until 2013. "I think it's time to put the gears in motion here... It will affect trading. The ultra high volume, you know algorithm driven trading, it’ll have a big impact there."

"So the day trading crowd, the in and out crowd, that’s what this is intended to stop, or is it meant to raise money, I don't get it," Cavuto said.

DeFazio countered, "There are very prominent economists including Joe Stiglitz and others who say you get a salutatory effect ‘cause you rein in some of the unbelievable increases in volume and volatility… and it'll raise money to invest in either the real economy or a plan to reduce our deficit and debt, which should assure the markets."

Cavuto noted that European countries have a similar tax and added,"They're not exactly firing on all cylinders."

DeFazio shot back amicably, "Are we firing on all cylinders?"

That obviously got to Cavuto because he started to get riled. "We might have Euro go kablooey this weekend, we might have Greece defaulting this weekend…. Do you think now is the time to be advocating this in a dicey world economy?"

Unfazed, DeFazio said, "Absolutely. It's time to rein in some of the worst, volatile speculative trading."

Apparently unable to defeat the merits of the proposal, Cavuto changed the subject to bashing Congress. "Who reins in Congress' volatility? Who reins in Congress’ propensity to spend? I mean, you guys are so interested in affecting how Wall Street conducts its business that you don't look in the mirror and see how you're conducting yours."

DeFazio said, "I voted for in 95 (the balanced budget amendment). Remember, we balanced the budget in the 90s with the Clinton tax increases which the Republicans didn't repeal, and then the Republican reforms and cuts."

Cavuto returned to the transfer tax. "What is your definition of useless speculative trading?"

"Someone who trades something 1000 times a minute that has nothing to do with… the underlying values of that transaction,” DeFazio answered.

Cavuto said, "All the Wall Street guys hate it. All the individual investors are not big fans of paying more for their trades."

DeFazio responded, “They thought so too in '34. They said it would destroy the economy when FDR doubled the existing transaction tax and guess what? He used the money to rebuild the real economy and the stock market went up."

Cavuto credited "something called World War II."

DeFazio said, "We had the transaction tax all the way through World War II until 1966 when we built the greatest economy the world has ever seen, somehow it didn't hurt. Somehow, it didn’t hurt! …WE NEED JOBS. WE NEED JOBS, NEIL, AND WE NEED TO INVEST TO CREATE JOBS!" His voice echoed off the walls.

"You increase the cost of doing business," Cavuto argued.

DeFazio said, “Jobs, Jobs, Oh, The job creators are doing a great job, aren’t they? …Bill Clinton raised taxes and we had 3.8% unemployment and paid down debt. Let’s go back to the bad old days.”

Cavuto claimed, "It had nothing to do with lowering all the investment taxes that he lowered, or the internet boom that had nothing to do with his administration."

A chart of the Dow Jones Industrial Average from 1900-2010 shows the Dow was below 100 around 1934, then around 1966, it was close to 1000.

Peter wins! Neil loses!

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