A wondrous piece of illogic

This is from across The Pond but we have our own domestics making much the same argument:

Assemblyman Phil Steck has been leading the charge to stop sending the revenue back to Wall Street from the minuscule transaction tax. Such an act could net the state up to $19 billion a year.

....

"The tax is in sum and substance one quarter of one percent, it's nothing . . . and according to data from Tax and Finance it was $1.6 billion in June alone," Mr. Steck said during a phone interview. "The present circumstances demand it . . .Teachers are being laid off . . .grant-based programs have been withheld. Upstate some of our education funding is all grant-based."

This is indeed the argument made about a financial transactions tax (or the Robin Hood Tax) here. It’s a teensie, tiny, tax but it’ll raise a fortune. One of the two statements has to be wrong of course, tiny taxes don’t raise lots, a tax which raises lots of revenue is not tiny.

One of us did a paper elsewhere explaining the larger story of why an FTT is a truly bad idea. We’re not trying to cover the same ground again here.

Rather, we just want to marvel at the mindset on display. $1.6 billion a month is real money even to New York state’s finances or to the assembled cash flows of Wall Street. That’s why the desire on the part of the politicians to collect it of course. But that very eagerness driven by the size shows that it’s not a small tax.

The cognitive dissonance of insisting that $19 billion a year being pulled out of one industry in one city is “nothing” is painful to the logic detectors.