This is pernicious and should be outlawed. The interest rates are bad enough -- they are posted but people See such loans as a means of survival -- money goes to basic needs, whether it is food, shelter, or feedog an addiction (let's not get into a clinical argjument here, the payday lenders do not care what you use the money for -- As for "basic needs", check the literature on delay discounting). Normally, you use your Visa card and don't pay, they eventually say "No more credit for you," and take your card away. You can't go to jail for owing money, you just get your credit score busted and no more loans.
But payday loans have an insidious collection mechanism. They require you to write a post-dated check -- if you do not make it good, it becomes a bad check and you can go to jail for that.
A solution for that (in addition to ursury ceilings) would be to outlaw the practice of post-dated checks as a condition of loans. Require these lenders to take the same risk of non-payment as credit card issuers do. Why should our criminal courts act as collection agents for predatory lenders? It's a misuse of taxpater money.
Frank T.
I thought I could find the link, but until I can, I want to remove my comment. It was on CNBC and Fox News (yes, I know the feelings about Fox on here), but you'd think they both would have posted something. So, not wanting to be someone fabricating stuff, please delete what I posted. thanks.
getting some press but there were a lot of dedicated people working on these issues in late 90's - particularly predatory lending and NO ONE would listen. I remember taking trips to Springfield, IL to plead with state legislators to do something about predatory lending and it fell on deaf ears.
It makes me so angry to hear Wall Street blow-hards, politicians and even Greenspan say they didn't see it coming. BULLSHIT - they were warned that this shit was happening but they chose to ignore it because people on Wall Street were making boat loads of money on these shitty loans.
Organization such ACORN, Center for Responsible Lending, Wookdstock Institute were warning people about the problems - NO ONE would listen.
Again, it is good that the issue of the 'unbanked' and predatory lending is getting some press but this SHIT has been happening for quite some time. It is just that finally because the repercussions of this BULLSHIT is being felt on Wall Street and rest of America that people are starting to pay attention.
I sometimes wonder if this crisis didn't happen whether predatory lending would've gotten any attention - probably not.
Some requirements for opening bank accounts can prevent unbanked individuals from utilizing mainstream banking services. 87 percent of banks require a credit check such as ChexSystems in order to open an account, which impacts unbanked individuals with poor credit histories. The vast majority of banks also require either a driver’s license or passport.
This was a problem back in 2000 when I was working on this issue in Chicago. People were unbanked because mainly requirement of credit check. I developed a program with City Colleges of Chicago to offer free adult financial literacy classes and we got a few banks to accept a certificate of completion as a substitute for credit checks. Even today this is a problem.
Interesting to note the increase in generation of PIK notes (Payment-In-Kind notes) when private equity firms aren't able to make good on their scheduled interest payments to their investors.
Payment-in-kind, or PIK, notes allow borrowers to pay interest with more debt instead of cash.
details how there is an attempt to utilize PIK notes for an LBO.
There is supposed to be somewhere between $33 billion to $34 billion in PIK notes coming due against private equity firms during the summer of 2010 (according to this article at Geoffrey Parnass at Private Equity Law Review site). Along with the ongoing housing difficulties you just mentioned, the CRE market and these PIK notes (and all those other variables), 2010 should be an interesting year.
That is, if "interesting" equates to a "holy crap" situation!
if you can dig up state laws and see what's going on...
yes an initial deposit, or a too long of a hold on the 1st check would be a deterrent if you're living paycheck to paycheck and need that money immediately.
Still, I've lived in 7 states and found cheap initial deposits, free checking in all of them.
Then, I have "internet banks" which are out of state.
So, I think there is more to this story, such as they do not trust banks to even go find about about a checking account....
or maybe they do not know how to write a check at all, maybe they cannot read, cannot add/subtract and the idea of a balance without cash in pocket is too much.
What's the English literacy rate in the U.S. these days...
but I know you can do all banking in Spanish..probably the entire thing and writing a check is just a proper name and some numbers so that shouldn't be a deterrent.
If you cannot read at all (any language), that maybe a bigger problem.
I have never had a credit check for any bank account and even some brokerage accounts. Never. No one ran my "credit report" and I didn't open a Scottstrade account because they were using that as a basis to approve non-margin accounts and I thought that was B.S. since there were "no loans involved".
You can get a bank account with pretty much any foreign id too, you don't even need a social security number.
So, whoever is claiming this, well, I don't know where they are going. I have little free checking all over the place because I use them for the "internets" to make sure I'm not putting my real funds, financial data online and also for convenience because I live in a rural area. You can open these things for next to nothing and also maintain a balance of like $25 bucks or whatever..
all free and as long as you don't overdraft, I've never paid a single anything.
I think this is some sort of myth, else why would people who just declared bankruptcy so easily open a free checking account? When you're in bankruptcy, your credit score just went to complete shit, esp. before it's closed out....
i.e. a credit score @ 550 or the lowest score possible.
I'm not even sure if they run any criminal checks, i.e. looking for people who forge checks, bounce checks repeatedly and so on.
I've actually asked this because when they run your credit too many times, it can lower your score and I believe they must tell you....so as far as I know they did not do any sort of credit check and that's asking them directly if they were.
so maybe they are doing something when you give your SS but I'm positive you can open an account with no credit history or a bad credit score...
now something criminal? I'm not sure because I've never done anything criminal.
This blog and study ignores a very important piece of data: banks and banking varies from state to state and in some states or cities, one finds that a hefty minimum deposit is required for checking access, hence the unbanked!
They pay larger fees on a money-on-hand basis, which is why the data indicates the unbanked are in the lower-income groups.
Yet another example of why all data are crucial prior to arriving at a conclusion, and why the pop culture media is so consistently inferior at presenting any but skewed data.
They go from congress to be lobbyists, and this appears to be universal as the legislative assistants (LAs), administrative assistants (AAs) and congress critters so frequently flow in the same direction --- to the lobbyist and PR firms, or the create their very own (Albright Group, etc.).
Or, in the case of someone like....say, Senator Patty Murray (D-WA), the staffers who leave go into the lucrative jobs-offshoring industry --- seeing no problem with driving unemployment up and up and up in America! (I once did a research project on her staffers.)
And they frequently return to government to further enhance their future earnings upon returning to the lobbyist sector (e.g., Tara O'Toole, pharaceutical lobbyist now at the Dept. of Homeland Security). Had one looked at Teddy Kennedy's staff, shortly before his death, one would have found former Monsanto and Big Pharma employees.
And the beat goes on......
[Disclaimer: I'm not picking on the dems here, but simply ignore that other bunch altogether and have traditionally hoped for something better from the so-called dems.]
So, no they are not that easy to open. The problem of the 'unbanked' has been a problem for a while. And you're right that financial education would help out tremendously.
Ok, the transaction tax is a transaction tax, not based on overall gross profits, income etc. of individuals or corporations. I'm referring to the fact many investment institutions pay zero corporate tax to hedge funds being able to manipulate income tax to a 15% capital gains tax through various loopholes.
Simply observing that their profits are made from markets hence a transaction tax would capture this area. I'm not confusing income vs. a transaction (Tobin) tax.
On spot oil, sure if they must take possession of the physical commodity, I don't see any issue here.
Not what I was referring to.
Yes I saw your scale but what I am saying is to just take one type of commodity, traded on the NYMEX for ex. oil futures, and on just that one element, try this tax. Instead of across the board on stocks, options, all commodities futures and so on. the reason for that is to test it, to make sure the tax doesn't have unforeseen consequences first.
As previously noted, much of your proposal is outside a transaction tax and as we know, while these are great ideas...from regulators like the SEC to Congress....they simply are not implementing or legislating these changes....
so in terms of modifying a transaction tax exclusively, don't bank on (ha ha) those proposals getting anywhere (although of course they should).
So, all I'm referring to is a transaction tax. Nothing else. Any other comments imply an effect but are not to imply other policy/regulatory areas.
On routing revenues to specifics, I think DeFazio has his legislation allocated to pay down the deficit exclusively.
That's fine by me, but just handing Congress funds, we know what they will do, dole it out to their favorite projects and favorite organizations and play political games...which most assuredly are not the most bang for the buck (as we saw from the 1st Stimulus) or really in the best national interest
And yes, we should have caps on credit cards. As for payday loans - that's a little more difficult - generally the problem again is one of financial literacy - very basic stuff like budgeting.
A good portion of the population is too damn stupid to use a credit card or any credit whatsoever. You could mandate tests or certification programs, but it would be like those driver's seminars you have to take if you get a ticket. And then there would be all this hewing and hawing from retailers. It's also like mobile phone contracts, people just sign, or pretend to read then sign.
We need to reign in on predatory lending. Credit should be considered a precious thing, guarded and only given out to qualified individuals. I know this sounds bad, but it was like that when the first forms of credit cards and such. My old man once told me how it was a bitch to get a diner's card.
There should be rules for credit issuances. If you make $1000 a month, your limit for consumer credit should be no more than a week's paycheck. Well something like that. I've seen folks who make minimum wage get a platinum card with a 10k limit. That's insane, no one below 100k/yr income should get something like that! Secondly, if you have one Visa, then that's all you get from Visa, same with the others. Don't like the card? Fine, pay in full, and terminate, then get another one.
We also need to make mortgages hard to get again. Back in the day, you actually had to have 20% for a down payment. This no-money-down shit has got to go. And you had to verify your income. Imagine that! Yes, many won't be able to afford a home. Well if that happens to enough people that would place a pressure on the price of housing. Maybe now we'd get affordable homes. Otherwise, rental isn't bad. Trust me, someone will come up with a way to make an affordable home for the masses again. But for crying out loud, don't give away mortgages like they're gum!
Rebel, I hear you on paydays. But this also ties to interest rates on credit cards. Why can't we cap the rates? If they want to use LIBOR, fine. But if you're borrowing the money from the Federal Reserve/Treasury, then you get a cap. If the open window is a fraction of a percent (let's say 0.25%) and LIBOR is 2%, then you're capped at a ratio of prime, say 2x of prime. You still make your profit, and folks have a chance. Payday loans also carry a risk for the lender, as you know, but really we have to ask WHY are folks going to them? We solve that, we'd all be ahead.
1) You can't implement such a thing because the tax is automatically assessed at the time of the transaction. There is no way to know the income level of the client, as trades are handled by the brokers, who then later pass on the cost of the tax. The only possibility is to increase the fees at certain volumes of orders (i.e. 1000 shares to 10k shares pay one tier, etc). But here you will also invite hanky panky.
2) Oil trading on the spot market is next to impossible to regulate. Most deals are done over the phone or electronic on proprietary OTC networks. For example, some company, say Aramco could have sold oil to Phillips, but while the barrels are in shipment, they could have gotten an offer for that cargo. So Phillips simply orders the ship to go to whatever terminal that new owner uses. Spot oil isn't a derivative, it's the actual product.
Now regarding benchmark contracts like on the NYMEX, well I've already proposed scaling the margin. Also as oil grows in price, so do the trading fees. Eventually the smaller speculators won't be able to bear the costs and drop out. You could concievably raise margin levels to even 50%. If you outlaw financing such transactions if margin costs reach a certain threshold, then even Goldman wouldn't be able to hold on for long.
AIG and GS should be able to trade these things, but once more if it is on a regulated exchange, its rules that we play by. AIG got in trouble because essentially the over traded. Goldman didn't care. And the costs of putting on that trade actually was made easier at times. If, as proposed, these contracts were only allowed on the exchange, then you see where everyone is at. Think about it, this won't be over the counter, there will be an order book. Secondly, all parties must have put up the performance bonds (margin). There will be a clearing mechanism.
3) That's more of an income tax thing. I'm not sure what you want out of this by fair share. You want to raise corporate income taxes?
With regards to congress, I still don't believe the bill would go for so-call jobs creation. And lets be honest, it isn't a WPA we're talking here. What would end up happening is that the money would be taken from one constituency and then placed into the hands of another constituency. You take from a bank in a New York City congressional district, and give it to a construction company in say a Cleveland or Dallas congressional district. Let's be honest, that's whats been happening. Often it's to the backers of a given candidate, masquerading as public works.
Frankly, I would be more in support of this if it were legally binding to something specific, as you said. The only worthy things, in my opinion at least, would be for the following:
1) National Health Insurance
2) Deficit reduction
3) National debt reduction
It has to be for only one of the three to be truly effective, otherwise it's too watered down. Also, say it went to one of the second two, then Congress shouldn't realize it can still spend that amount and think the fee revenue will cancel that out. If you bring in 10 billion, for example, then Congress should cut 10 billion in spending. Make it count, don't replace one with the other. In regards to the first one, it could be used as a lock box fund to pay for subsidizing premiums for low income or what have you. You get the idea.
What you don't want, is the revenue stream to become another pork funding vehicle. Or say you saw an increase of 50 billion from this, that Congress now thinks it can increase spending by the same amount.
This is pernicious and should be outlawed. The interest rates are bad enough -- they are posted but people See such loans as a means of survival -- money goes to basic needs, whether it is food, shelter, or feedog an addiction (let's not get into a clinical argjument here, the payday lenders do not care what you use the money for -- As for "basic needs", check the literature on delay discounting). Normally, you use your Visa card and don't pay, they eventually say "No more credit for you," and take your card away. You can't go to jail for owing money, you just get your credit score busted and no more loans.
But payday loans have an insidious collection mechanism. They require you to write a post-dated check -- if you do not make it good, it becomes a bad check and you can go to jail for that.
A solution for that (in addition to ursury ceilings) would be to outlaw the practice of post-dated checks as a condition of loans. Require these lenders to take the same risk of non-payment as credit card issuers do. Why should our criminal courts act as collection agents for predatory lenders? It's a misuse of taxpater money.
Frank T.
Oh you're good....real good.
Howz this link. See you don't have Alzheimer's. ;)
I thought I could find the link, but until I can, I want to remove my comment. It was on CNBC and Fox News (yes, I know the feelings about Fox on here), but you'd think they both would have posted something. So, not wanting to be someone fabricating stuff, please delete what I posted. thanks.
and none of us have written a detail post on the latest taxpayer sucking adventures of Fannie/Freddie either.
Notice Barney Frank doesn't seem to bring it all up.
You know they both want 400 billion dollars, and before New Years.
Let's hope they are getting some out of the way. Freddie/Fannie "suspended" foreclosures for the holidays.
How nice of them.
getting some press but there were a lot of dedicated people working on these issues in late 90's - particularly predatory lending and NO ONE would listen. I remember taking trips to Springfield, IL to plead with state legislators to do something about predatory lending and it fell on deaf ears.
It makes me so angry to hear Wall Street blow-hards, politicians and even Greenspan say they didn't see it coming. BULLSHIT - they were warned that this shit was happening but they chose to ignore it because people on Wall Street were making boat loads of money on these shitty loans.
Organization such ACORN, Center for Responsible Lending, Wookdstock Institute were warning people about the problems - NO ONE would listen.
Again, it is good that the issue of the 'unbanked' and predatory lending is getting some press but this SHIT has been happening for quite some time. It is just that finally because the repercussions of this BULLSHIT is being felt on Wall Street and rest of America that people are starting to pay attention.
I sometimes wonder if this crisis didn't happen whether predatory lending would've gotten any attention - probably not.
RebelCapitalist.com - Financial Information for the Rest of Us.
FDIC Survey:
This was a problem back in 2000 when I was working on this issue in Chicago. People were unbanked because mainly requirement of credit check. I developed a program with City Colleges of Chicago to offer free adult financial literacy classes and we got a few banks to accept a certificate of completion as a substitute for credit checks. Even today this is a problem.
RebelCapitalist.com - Financial Information for the Rest of Us.
Interesting to note the increase in generation of PIK notes (Payment-In-Kind notes) when private equity firms aren't able to make good on their scheduled interest payments to their investors.
An apt descrption from this Bloomberg article:
details how there is an attempt to utilize PIK notes for an LBO.
There is supposed to be somewhere between $33 billion to $34 billion in PIK notes coming due against private equity firms during the summer of 2010 (according to this article at Geoffrey Parnass at Private Equity Law Review site). Along with the ongoing housing difficulties you just mentioned, the CRE market and these PIK notes (and all those other variables), 2010 should be an interesting year.
That is, if "interesting" equates to a "holy crap" situation!
if you can dig up state laws and see what's going on...
yes an initial deposit, or a too long of a hold on the 1st check would be a deterrent if you're living paycheck to paycheck and need that money immediately.
Still, I've lived in 7 states and found cheap initial deposits, free checking in all of them.
Then, I have "internet banks" which are out of state.
So, I think there is more to this story, such as they do not trust banks to even go find about about a checking account....
or maybe they do not know how to write a check at all, maybe they cannot read, cannot add/subtract and the idea of a balance without cash in pocket is too much.
What's the English literacy rate in the U.S. these days...
but I know you can do all banking in Spanish..probably the entire thing and writing a check is just a proper name and some numbers so that shouldn't be a deterrent.
If you cannot read at all (any language), that maybe a bigger problem.
I have never had a credit check for any bank account and even some brokerage accounts. Never. No one ran my "credit report" and I didn't open a Scottstrade account because they were using that as a basis to approve non-margin accounts and I thought that was B.S. since there were "no loans involved".
You can get a bank account with pretty much any foreign id too, you don't even need a social security number.
So, whoever is claiming this, well, I don't know where they are going. I have little free checking all over the place because I use them for the "internets" to make sure I'm not putting my real funds, financial data online and also for convenience because I live in a rural area. You can open these things for next to nothing and also maintain a balance of like $25 bucks or whatever..
all free and as long as you don't overdraft, I've never paid a single anything.
I think this is some sort of myth, else why would people who just declared bankruptcy so easily open a free checking account? When you're in bankruptcy, your credit score just went to complete shit, esp. before it's closed out....
i.e. a credit score @ 550 or the lowest score possible.
I'm not even sure if they run any criminal checks, i.e. looking for people who forge checks, bounce checks repeatedly and so on.
I've actually asked this because when they run your credit too many times, it can lower your score and I believe they must tell you....so as far as I know they did not do any sort of credit check and that's asking them directly if they were.
so maybe they are doing something when you give your SS but I'm positive you can open an account with no credit history or a bad credit score...
now something criminal? I'm not sure because I've never done anything criminal.
This blog and study ignores a very important piece of data: banks and banking varies from state to state and in some states or cities, one finds that a hefty minimum deposit is required for checking access, hence the unbanked!
They pay larger fees on a money-on-hand basis, which is why the data indicates the unbanked are in the lower-income groups.
Yet another example of why all data are crucial prior to arriving at a conclusion, and why the pop culture media is so consistently inferior at presenting any but skewed data.
Thank the gods for the blogs and bloggers.
They go from congress to be lobbyists, and this appears to be universal as the legislative assistants (LAs), administrative assistants (AAs) and congress critters so frequently flow in the same direction --- to the lobbyist and PR firms, or the create their very own (Albright Group, etc.).
Or, in the case of someone like....say, Senator Patty Murray (D-WA), the staffers who leave go into the lucrative jobs-offshoring industry --- seeing no problem with driving unemployment up and up and up in America! (I once did a research project on her staffers.)
And they frequently return to government to further enhance their future earnings upon returning to the lobbyist sector (e.g., Tara O'Toole, pharaceutical lobbyist now at the Dept. of Homeland Security). Had one looked at Teddy Kennedy's staff, shortly before his death, one would have found former Monsanto and Big Pharma employees.
And the beat goes on......
[Disclaimer: I'm not picking on the dems here, but simply ignore that other bunch altogether and have traditionally hoped for something better from the so-called dems.]
So, no they are not that easy to open. The problem of the 'unbanked' has been a problem for a while. And you're right that financial education would help out tremendously.
RebelCapitalist.com - Financial Information for the Rest of Us.
answer: because they're broke! A paycheck ain't covering the bills and they live week to week, day to day.
Here's something pretty stupid. over 25% of Americans are under banked or not banked and using payday loans.
I mean that's pretty incredible when checking accounts are basically free and anyone can get one.
So, they pay huge fees in check cashing services and so on.
I mean there is a lot of bizarre stuff out there that a little financial education could fix
(in addition to capping interest rates/fees period).
looks like we're stealing NC's theme.
Ok, the transaction tax is a transaction tax, not based on overall gross profits, income etc. of individuals or corporations. I'm referring to the fact many investment institutions pay zero corporate tax to hedge funds being able to manipulate income tax to a 15% capital gains tax through various loopholes.
Simply observing that their profits are made from markets hence a transaction tax would capture this area. I'm not confusing income vs. a transaction (Tobin) tax.
On spot oil, sure if they must take possession of the physical commodity, I don't see any issue here.
Not what I was referring to.
Yes I saw your scale but what I am saying is to just take one type of commodity, traded on the NYMEX for ex. oil futures, and on just that one element, try this tax. Instead of across the board on stocks, options, all commodities futures and so on. the reason for that is to test it, to make sure the tax doesn't have unforeseen consequences first.
As previously noted, much of your proposal is outside a transaction tax and as we know, while these are great ideas...from regulators like the SEC to Congress....they simply are not implementing or legislating these changes....
so in terms of modifying a transaction tax exclusively, don't bank on (ha ha) those proposals getting anywhere (although of course they should).
So, all I'm referring to is a transaction tax. Nothing else. Any other comments imply an effect but are not to imply other policy/regulatory areas.
On routing revenues to specifics, I think DeFazio has his legislation allocated to pay down the deficit exclusively.
That's fine by me, but just handing Congress funds, we know what they will do, dole it out to their favorite projects and favorite organizations and play political games...which most assuredly are not the most bang for the buck (as we saw from the 1st Stimulus) or really in the best national interest
And yes, we should have caps on credit cards. As for payday loans - that's a little more difficult - generally the problem again is one of financial literacy - very basic stuff like budgeting.
RebelCapitalist.com - Financial Information for the Rest of Us.
A good portion of the population is too damn stupid to use a credit card or any credit whatsoever. You could mandate tests or certification programs, but it would be like those driver's seminars you have to take if you get a ticket. And then there would be all this hewing and hawing from retailers. It's also like mobile phone contracts, people just sign, or pretend to read then sign.
We need to reign in on predatory lending. Credit should be considered a precious thing, guarded and only given out to qualified individuals. I know this sounds bad, but it was like that when the first forms of credit cards and such. My old man once told me how it was a bitch to get a diner's card.
There should be rules for credit issuances. If you make $1000 a month, your limit for consumer credit should be no more than a week's paycheck. Well something like that. I've seen folks who make minimum wage get a platinum card with a 10k limit. That's insane, no one below 100k/yr income should get something like that! Secondly, if you have one Visa, then that's all you get from Visa, same with the others. Don't like the card? Fine, pay in full, and terminate, then get another one.
We also need to make mortgages hard to get again. Back in the day, you actually had to have 20% for a down payment. This no-money-down shit has got to go. And you had to verify your income. Imagine that! Yes, many won't be able to afford a home. Well if that happens to enough people that would place a pressure on the price of housing. Maybe now we'd get affordable homes. Otherwise, rental isn't bad. Trust me, someone will come up with a way to make an affordable home for the masses again. But for crying out loud, don't give away mortgages like they're gum!
Rebel, I hear you on paydays. But this also ties to interest rates on credit cards. Why can't we cap the rates? If they want to use LIBOR, fine. But if you're borrowing the money from the Federal Reserve/Treasury, then you get a cap. If the open window is a fraction of a percent (let's say 0.25%) and LIBOR is 2%, then you're capped at a ratio of prime, say 2x of prime. You still make your profit, and folks have a chance. Payday loans also carry a risk for the lender, as you know, but really we have to ask WHY are folks going to them? We solve that, we'd all be ahead.
1) You can't implement such a thing because the tax is automatically assessed at the time of the transaction. There is no way to know the income level of the client, as trades are handled by the brokers, who then later pass on the cost of the tax. The only possibility is to increase the fees at certain volumes of orders (i.e. 1000 shares to 10k shares pay one tier, etc). But here you will also invite hanky panky.
2) Oil trading on the spot market is next to impossible to regulate. Most deals are done over the phone or electronic on proprietary OTC networks. For example, some company, say Aramco could have sold oil to Phillips, but while the barrels are in shipment, they could have gotten an offer for that cargo. So Phillips simply orders the ship to go to whatever terminal that new owner uses. Spot oil isn't a derivative, it's the actual product.
Now regarding benchmark contracts like on the NYMEX, well I've already proposed scaling the margin. Also as oil grows in price, so do the trading fees. Eventually the smaller speculators won't be able to bear the costs and drop out. You could concievably raise margin levels to even 50%. If you outlaw financing such transactions if margin costs reach a certain threshold, then even Goldman wouldn't be able to hold on for long.
AIG and GS should be able to trade these things, but once more if it is on a regulated exchange, its rules that we play by. AIG got in trouble because essentially the over traded. Goldman didn't care. And the costs of putting on that trade actually was made easier at times. If, as proposed, these contracts were only allowed on the exchange, then you see where everyone is at. Think about it, this won't be over the counter, there will be an order book. Secondly, all parties must have put up the performance bonds (margin). There will be a clearing mechanism.
3) That's more of an income tax thing. I'm not sure what you want out of this by fair share. You want to raise corporate income taxes?
With regards to congress, I still don't believe the bill would go for so-call jobs creation. And lets be honest, it isn't a WPA we're talking here. What would end up happening is that the money would be taken from one constituency and then placed into the hands of another constituency. You take from a bank in a New York City congressional district, and give it to a construction company in say a Cleveland or Dallas congressional district. Let's be honest, that's whats been happening. Often it's to the backers of a given candidate, masquerading as public works.
Frankly, I would be more in support of this if it were legally binding to something specific, as you said. The only worthy things, in my opinion at least, would be for the following:
1) National Health Insurance
2) Deficit reduction
3) National debt reduction
It has to be for only one of the three to be truly effective, otherwise it's too watered down. Also, say it went to one of the second two, then Congress shouldn't realize it can still spend that amount and think the fee revenue will cancel that out. If you bring in 10 billion, for example, then Congress should cut 10 billion in spending. Make it count, don't replace one with the other. In regards to the first one, it could be used as a lock box fund to pay for subsidizing premiums for low income or what have you. You get the idea.
What you don't want, is the revenue stream to become another pork funding vehicle. Or say you saw an increase of 50 billion from this, that Congress now thinks it can increase spending by the same amount.
Pages