As policymakers in the United States wrangle over how to avert the austerity bomb, the European Parliament voted overwhelmingly in favor of the financial transactions tax (FTT). The European FTT is expected to raise as much as €37 billion each year ($48 billion in U.S. dollars).

According to a release from the European Parliament:

Eleven EU countries planning to introduce a FTT won a resounding go-ahead from [Members of the European Parliament] MEPs on Wednesday. Together, they account for 90% of Eurozone GDP. MEPs have long advocated an FTT to make financial market players take more responsibility for resolving the crisis that they caused and to discourage excessive risk-taking in future….[The] resolution was adopted by 533 votes to 91, with 32 abstentions. 

The benefits of tax go well beyond the revenue it would raise. The tax would hit high-volume, high-speed trading the hardest and would serve to discourage short-term speculation in financial markets. By reducing the incentive to gamble in the financial markets, the tax would encourage long-term investments in real world businesses that create jobs.

A similar proposal in the United States by Sen. Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-Ore.) would place a tax of 3 cents per every $100 in Wall Street trades and would raise hundreds of billions of dollars over the 10-year budget window.

With Congress scrambling to find ways to raise revenue without squeezing working people, the Harkin–DeFazio proposal to implement a financial transaction tax here in the United States should be a no-brainer in addition to allowing the Bush tax cuts on the 2% to expire.