Subject: Wall Street
From: Brent Budowsky <[email-masked]>
To: John Podesta <[email-masked]>
Date: Mon, 13 Jul 2015 20:04:23 -0400

John, I am watching the world react to the speech and maintaining radio silence
for now.  But here is a thought, I am going to do a column on this at some point,
if you like the idea, you can steal it.....

Enact a cap gains tax cut for sales of investments in spinoff stocks of major banks
and Wall Street firms that voluntary "break up."  Nothing mandatory.  If the banks
divest assets into smaller independent companies that become spinoff stocks, those who buy and sell those spinoff stocks pay a lower cap gains tax.  This is a pure
Lloyd Bentsen kind of idea, powerfully incentivize what we want to happen, if he were still here I'd be sending this memo to him and he'd put the bill in tomorrow....

Economics and finance: this has the result of breaking up banks, reducing or
eliminating "too big to fail", and would have some pro-growth effect.

Politically: major financial power would support this because they know the asset
values would be unlocked, net equity values would skyrocket, and their investment
profits would be gigantic.

In effect, we get a lot of backdoor Glass-Steagall effect by creating smaller and
more efficient entities through a voluntary incentive rather than legislative or
regulatory mandate (which I would support but we both know won't happen soon.).

And: even Wall Street execs who might resist a breakup would make out like bandits
with skyrocketing value of their insider stock and stock options......

And: CBO and Joint Tax Committee would probably, and should, score this as
deficit reduction because the surge of new transactions of buying and selling the
spinoff stocks taxed at a lower cap gains rate would generate far more revenue than
transactions taxed at a high rate would otherwise not happen.

My view is HRC should support the Warren-McCain partial Glass-Steagall bill,
certainly before the first debate, but my suggestion above is even better because
it could actually happen and is win-win-win with a similar result.....

Brent

Sent from my iPad