The impost could then be used to fund the “Bail Out” and provide ongoing insurance for the next boom/bust cycle.
From this side of the Pacific the idea appears to be indicative of its time… Think: How do we govern the excesses of Wall St? Governments only have only two levers to pull. One is regulatory and the other is taxes. We have tried regulatory (Think: Post 2000 Crash/ENRON/Sarbanes Oxley) now let’s try taxes.
The problem with the tax solution is it appears progressive (after it all it quickly pours cold water on Wall St’s more exuberant and complex activities) but in reality it will be regressive over the longer term for the US economy (Think: In a worse case scenario money will find another play ground). At the very least it takes liquidity out of the private sector and moves it into the Government sector. What introducing a transaction tax on Wall St isn’t going to do is fix the long-term structural issues facing the US economy today. Or, could it?
Mark wrote that Wall St needs to get back in the business of providing capital to business. What if a self-imposed transaction withholding fee retained by the NYSE, NASDAQ, Amex and OTC could do just that? After all what the US and Wall St really needs right now is a strong vibrant and innovative economy not just another new tax.
Let’s see what Wall St could do for itself and the US economy by introducing a self-imposed transaction withholding fee and redistributing it to young entrepreneurs who can kick-start the US economy, begin the rebuilding process of turning the US economy around and set the foundations that will make the US economy the most successful in the 21st Century.
“If the NYSE, Nasdaq, Amex and OTC are trading 2 Billion shares a day or more , like today, thats $ 500 Million Dollars PER DAY. If there are 260 trading days a year. Thats about 130 Billion dollars a year. If volumes drop because of the tax. It is still 10s of Billions of dollars per year.”
– Mark Cuban: Tax the Hell Out of Wall Street and Give it to Main Street
If Mark’s estimates are correct then the US markets could seed approximately $10 Million Dollars in start-up funds into each US State per trading day.
So each day the Markets operate they could open or close by announcing to America the 50 lucky US Citizens who have secured $10 Million Dollars in Wall St Dollars to start building their American Dream. Alternatively it could be just 1 Citizen who has won $500 Million or 10 who have won $50 Million.
The reality is the Markets could announce just one winner who receives $10 Million per day and it would solve its PR crisis overnight but let’s stick with big picture.
The question is how are the daily winners selected? Who will be on the expert panel to determine who gets the cash? Then again why not just hold a lottery? Actually the best way to work this is to leave it up to the wisdom of the crowd.
Every quarter, in each locality around the country young entrepreneurs – and even those who are young of heart – should be invited to attend “town hall” meetings where they get to pitch their great ideas. The best idea at the show wins the right to progress to the next stage.
Just like the college Basketball and the Football championships the winners progress on a knock out basis through each level of the competition until they reach the State Finals where the 70 daily winners for that state that quarter are decided by their peers.
The secret to the success of the competition is in each round all the competitors get to vote for the best idea (excluding their own). The winner then moves onto the next level where the pitch and vote process begins again. If getting the participants together in the one location is a problem then the pitches could be recorded and distributed via the internet.
Likewise, if the majority of the 70 successful entrepreneurs so choose, the funds could be pooled into a super fund and the 70 peers then vote on 1 or more winners to take the total funding pool for that quarter. This would help fund major structural projects of statewide significance.
So the funds could reshape small communities, cities or states (or even the country) but it is up to the participants – the entrepreneurs and the visionaries, not the bean counters, the bench markers and the regulators – to decide
Americans love competition. Be it reality TV shows like American Idol, So you think you can dance and the Apprentice, or Professional Sport, Politics or Business. They love to compete and they love to cheer on their favorites. They also enjoy coming together in groups to discuss and share experiences (Think Town Hall Political Rallies and Conferences) this approach feeds that need to compete, collaborate and innovate that is at the heart and soul of the American Dream. What’s more it would make great reality TV where the TV audience could SMS their pennies to the start-up of their choice… but that’s another story.
This approach takes Wall St back to its grass-roots. More importantly it places funds in the hands of people who can make a real difference to the health and well-being of the US economy. It provides them with a very real incentive to get involved in the rebuilding and recovery process.
Sure some the projects may fail and money will be miss spent but even if only 1 in 100 of the winning ideas is a winner – and the odds should be better than that after all the winning ideas would have been selected from 10’s if not 100’s of thousands of ideas – then that would mean a new IPO listing on the NYSE or the NASDAQ every two days once the scheme hits its straps and the start-ups prove their worth to the US economy.
Two years down the track the Bail Out will be forgotten and Wall St will have done what it does best. It will have turned dust into dollars. And that’s isn’t such a bad thing for a Street with a growing reputation for turning hard-earned Dollars into Dust…
Posted on May 11, 2010
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