Whereas, the stock markets do not accurately reflect the underlying health of the U.S. economy, but rather are primarily driven by the speculative bets made by ultrawealthy speculators; and

Whereas, the daily shifts in the values of corporate stocks have almost no impact on the lives of most Americans; and

Whereas, less than half of all Americans directly own shares of corporate stock, and less than a third own more than $5,000 worth of stock; and

Whereas, those who do own stock trade their shares very rarely; and

Whereas, the only situation in which purchasing a share of stock puts new money into the real, productive economy is during an initial public offering (IPO); and

Whereas, IPOs represent less than 0.15 percent of all stock traded annually; and

Whereas, the prices of stock primarily reflects the sentiments of speculators betting on the profitability of firms; and

Whereas, the richest 10 percent of the population own 91 percent of all stock and 94 percent of all other financial assets; and

Whereas, the gambling by these speculators in the financial markets was one of the primary causes of the 2007-08 financial collapse; and

Whereas, gambling in Atlantic City is taxed at 8 percent and gambling in Las Vegas is taxed at 6.25 percent; and

Whereas, a progressive speculation reduction tax would reduce the volatility of financial markets; and

Whereas, a progressive tax could tax trades held for less than a week at 5 percent, trades held less than a month at 2 percent and trades held for more than a year at 0 percent; and

Whereas, as progressive tax would have almost no impact on the assets or returns of the CalSTRS or CalPERS retirement funds; and

Whereas, several European countries have successfully introduced these types of financial transactions taxes; and

Whereas, multiple bills have been introduced in the U.S. Congress to create a financial transaction tax,

Therefore, be it resolved, that the California Federation of Teachers call on our elected officials to propose legislation to create a speculation reduction tax, or what is often called a financial transactions tax at the federal level.

• Passed as Resolution 17 by CFT Convention on March 24, 2019
• Submitted by the Executive Council