Skip to comments.DEFAZIO INTRODUCES FINANCIAL TRANSACTION TAX ACT TO REIN IN WALL STREET AND GENERATE REVENUE FOR NATIONAL PRIORITIES
Posted on 01/22/2021 5:25:22 AM PST by Red Badger
Today, U.S. Representative Peter DeFazio (OR-04) introduced the Wall Street Tax Act, legislation to create a new tax on financial transactions that would generate billions in revenue, while reducing speculative trading and volatility in the market.
“High-frequency traders front-run the market and drive up prices for individuals, pension funds and other value investors,” said Rep. Peter DeFazio. “Some days high-frequency traders trade billions of shares that they sometimes hold for only seconds or less. They reap enormous financial benefits for themselves and their privileged elite investors but add no value to our economy. Congress needs to rein in excessive speculative activity and protect working families from these dangerous practices while maintaining appropriate market liquidity. This legislation will curb unnecessary speculation and generate much-needed revenue to help the federal government fund national priorities and invest in the real economy to benefit all Americans.”
DeFazio’s Wall Street Tax Act addresses the disconnect between the financial system and the real economy by reducing unproductive, dangerous, and speculative trading. By increasing transaction costs slightly, the bill will help redirect investment that has flooded into transactions without economic value into more productive areas of the economy. It will also reduce the risk of financial crashes and limit the risks that high-speed arbitrage pose to our financial system.
The Wall Street Tax Act would tax the sale of stocks, bonds, and derivatives at 0.1 percent (10 basis points), and would raise an estimated $777 billion over a decade. A stock trade of $1,000 would incur a tax of just one dollar. The tax would apply to the fair market value of equities and bonds, and the payment flows under derivatives contracts. Initial public offerings and short-term debt (with a maturity of less than 100 days) would be exempted.
A 2019 Public Citizen report found that a financial transaction tax (FTT) will primarily impact America’s wealthiest individuals, while the average annual retirement account costs for a middle-income family would range from $13 to $35. The wealthiest 10% would experience an estimated $155 in average costs relating to their retirement accounts, while many would owe additional taxes for trading stocks outside of retirement accounts. While nearly 50 percent of U.S. families owned no stock whatsoever - including indirect ownership through retirement accounts—nearly 70 percent of upper-income Americans had stock or other personal investments, outside of retirement and savings accounts.
“As Americans continue to suffer in the economic fallout from the ongoing COVID-19 crisis, Wall Street’s profits have soared,” said Susan Harley, managing director of Public Citizen’s Congress Watch division. “The Wall Street Tax Act would begin to right this unconscionable imbalance while progressively raising $777 billion over the next decade that could be used to fund any number of important societal needs like expanded health care, investments in public education, creating green energy jobs, or rebuilding America’s infrastructure. Public Citizen commends Congressman DeFazio’s strong leadership in ensuring Wall Street pays its fair share.”
“The Wall Street Tax Act is a common-sense way to help restore a measure of fairness and balance to our economy,” said Frank Clemente, Executive Director of Americans for Tax Fairness. “It would make wealthy investors who have profited throughout this pandemic pay a fairer share of taxes. The $777 billion it would raise is desperately needed to recover from this COVID-19 depression and to promote growth in our economy, building back our nation's decaying infrastructure and making new investments in things like housing, education and healthcare that will create good-paying jobs that Americans desperately need.”
“The Wall Street Tax Act would reduce incentives for Wall Street’s most reckless and least valuable speculative activity and instead encourage Wall Street to find new ways to make money from longer term, productive investments that create jobs, and develop products and services that make the U.S. competitive in a global economy,” said AFL-CIO Policy Director Kelly Ross.
“This bill is an important step in restoring the real economy for white, Black and brown working families, especially in this time of rising unemployment due to the global pandemic,” said Mandla Deskins, Take on Wall Street and Americans for Financial Reform Education Fund. “The Wall Street Tax Act would both help protect working people from the most acute impacts of risky Wall Street behavior, and raise revenue that could be used for critical public services and investments.”
The wealthiest 10 percent of Americans own an estimated 85 percent of stock market wealth. The bipartisan Tax Policy Center estimates that a tax of this kind would only apply to the highest earners in the country, with almost half of those affected belonging to the wealthiest 1 percent.
The bill has been co-sponsored by House Majority Whip James Clyburn and Reps. Earl Blumenauer (OR-03), Jamie Raskin (MD-08), Eleanor Holmes Norton (DC), Mark Takano (CA-41), Peter Welch (VT-AL), Ayanna Pressley (MA-07), Grace Napolitano (CA-32), Adam Smith (WA-09), Tim Ryan (OH-13), Pramila Jayapal (WA-07), Ro Khanna (CA-17), and Jesus “Chuy” Garcia (IL-04).
More loot for the thieves and liars in the District of Criminals, what could go wrong? /s
I thought wall street was a big backer for the left. How’s it going so far
““High-frequency traders front-run the market and drive up prices for individuals, pension funds and other value investors,”
Sure glad the givernment is really concerned about price increases affecting pension funds and other value investors and therefore need to step in to protect them from “high frequency traders”. And taxing transactions is just the right medicine. /s
I actually like this plan and wish Trump had done it - although I doubt it goes anywhere with the Democrats either.
With high-speed trading, they write computer programs that are actually able to see trades moving towards the markets. The programs get ahead of the trades, and they skim off of the trades.
For example, if a buy-order for 1Million shares of GM was just launched, the High Speed trading programs will go in and buy GM before the the 1M buy order makes it to the NYSE (we’re talking a handful of milliseconds here), and then the 1M buy order makes it to market, GM goes up slightly, and the High Speed trading program promptly sells GM.
Other than making a relative handful of people very rich (at the expense of others), they serve NO VALUE to this country.
“Wall street” ain’t gonna pay the tax, you will.
“DeFazio’s Wall Street Tax Act addresses the disconnect between the financial system and the real economy by reducing unproductive, dangerous, and speculative trading.”
So now the government wants to control how I play the stock market? Congratulations Wall Street, you got exactly what you paid for. Let me know how it feels when you see your pay check for $800 a week rather than $80,000.
He’s a phony left-wing populist, who has been trying this for years.
The 5 Congressional Districts in Oregon are perfectly gerrymandered, so this phony gets reelected every 2 years.
His heritage is New England liberal who hates Republicans, he’s been doing it his whole life.
Computer trades happen in MICROSECONDS.
In the span of just a few seconds, millions of trades happen................................
Thieves, thieves, tramps and thieves...
Kind of like politicians, eh?
What’s the matter? Are you jealous or afraid of the competition?
““This bill is an important step in restoring the real economy for white, Black and brown working families, ...”
See the leftists on wall street were covered by bringing racial politics into the tax bill. They forgot a few colors, and forgot to use alphabetical ordering of the races. And those working families who have some money in a 401k, they’ll pay the tax too when they retire and need to sell some of their meager investments. Demonkkkraps, always looking out for the little guy.
This will get traction this time.
The information campaign has started ginning up support.
Wall Street owns the dems. This isn’t going anywhere.
But it taxes all transactions. Not surprised you like it.
If these reforms are so motivated by the love of the people, or rather, the love of *some* people at the expense of others, why are billionaires funding this dismantling of the Constitution and our rights?
Wall Street back Biden in the 2020 by a ridiculous amount of money.
Schumer will kill this proposal, if it gets that far.
“Defraudio” is a phony left-wing populist from Oregon.
If a billionaire has 10 billion and loses one, he’s still a billionaire....................
He needs to rename it , “The Make London the Financial Capital of the World Act,” because that’s exactly what it will do.
And that's a bad thing?...........................
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