How early childhood education could benefit from a financial transaction tax
It’s no secret that early childhood education is a good idea. Not just for the children when they are children, but as they grow into adulthood. When Arthur Reynolds of the University of Minnesota studied Chicago’s Child Parent Centers (CPC) he found that that for every $1 invested society gets back a projected $11.
How? The study showed that,”The CPC resulted in significantly higher rates of attendance at 4-year colleges and employment in higher-skilled jobs and significantly lower rates of felony arrests and symptoms of depression in young adulthood.”
But state-wide there is not adequate early childhood education available for many low income children…putting them at a social class disadvantage. And since poverty is heavily racialized, there can be a racial disadvantage as well.
So when Rahm Emanuel, not known for his love of children in poverty, announced a multi-million dollar expansion of early childhood education, city-wise Chicagoans asked “Where’s the catch?”
It didn’t take long to find it. Rahm plans to borrow $17 million from several financial sources, including Goldman Sachs and the Pritizer Family Foundation. Even the conservative Chicago Tribune said the interest rate could mean these investors could double their money. A $17 million investment could return $34 million.
More dollars to wealthy investors when schools are starved for resources? When city infrastructure is crumbling? When working class Chicagoans are already being nickel and dimed by the parking deal, the red light cameras and similar financial scams?
The rubber stamp City Council has already approved the deal. But much more is needed to provide quality early childhood education for the children of Chicago and the rest of the state. Isn’t there a better way to expand opportunities for children besides soaking Illinois working families to pay off bankers and brokers? Sure there is. Pay cash up front and forget borrowing the money. But aren’t budgets tight? Where will the money come from?
How about from those that can afford it: the wealthy corporations who do business in Illinois but don’t like paying their fair share for the privilege.
Yes, it’s time to raise taxes on the rich. A good place to start would be a financial transactions tax. Chicago is where both the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) do business making complex trades worth over $800 trillion a year.
A financial transaction tax would require a change in state law. But a $1 or $2 on each trade could generate as much as $10-12 billion a year at current trading volume. That’s enough to expand early childhood across the entire state and have a whole lot of money left over for other vital Illinois concerns such as the public employee pension crisis for example.
Financial analyst Dr. William Barclay explains why a financial transaction tax is a good idea.
Of course the wealthy elite in this state is against the idea along with their political friends like Rahm Emanuel. They would rather profit off of children.
It will take a state-wide revolt to get a financial transaction tax and to raise taxes on the wealthy in other ways. But if we are successful our children’s future will be a brighter one.