A Comparison of TPC and the Pollin, Heintz and Herndon Revenue Estimates for Bernie Sanders's Financial Transaction Tax Proposal

Presidential candidate Bernie Sanders proposed a financial transaction tax to finance universal access to higher education. TPC estimated that it would raise $52 billion in its first year while Pollin, Heintz, and Herndon estimated it would raise $300 billion. This brief reconciles those differences. The Pollin, Heintz, and Herndon estimates assume a much larger volume of derivative transactions than appear to exist; they implicitly assume that transaction costs are much higher or elasticities much smaller than TPC; they account for offsetting changes in other tax revenues in a nonstandard way; they account for a vaguely articulated individual tax credit, which TPC ignored.