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).
I know two millionaires. Neither one of them is in ‘The Market’......... Real estate is their game.....................
...and every night the men would come around...and lay their money down.
I'm guessing that tax will also be on top of whatever capital gains they already have to pay......I'm sure those capital gains taxes are "no value" because people who came up with legal means to make a profit must be parasites.
I guess I missed the part in the tax code that if you made money quick enough it wasn't taxed and you were somehow exempt from capital gains.
I also didn't realize that coming up with new taxes on making money and building wealth was a conservative principle........
This gave access to the market for thousands of people who were previously priced out because they couldn't afford the commissions - every time they bought or sold stock. Now they'll get to pay Uncle Stupid for the privilege.
There is a book out that basically claims that a difference of a few miles of fiber optic cable can give traders an advantage—and we’re talking the speed of light here. That’s how fast the trades are happening.
“Wealth Tax”
Defazio's bill is a perfect example of how Democrats shake down industries for more donations.
Plenty of conservatives like taxes as an instrument of social engineering and justice, particularly if they feel they are taxed in a way you aren’t. Then, new taxes, because, you know, “fairness.”
“There is a book out that basically claims that a difference of a few miles of fiber optic cable can give traders an advantage—and we’re talking the speed of light here. That’s how fast the trades are happening.”
I know, I’ve heard of that also. I suspect most people don’t know about it, and also don’t know how much 0.1% will actually cost them.
Well Wall Street you got what you wished.
Now swallow.🙄
Soon.😝
By raising the cost of the transactions by increasing the tax, only the big fish who can trade in much bigger blocks of shares are left in the game.
This is much like so-called campaign finance reform. It sounds really nice on the surface until you figure out that it is designed to help the swamp which has sympathetic media outlets backing them and doesn't need to buy campaign time as much.
For which the tax changes nothing. In my non professional opinion you’re talking about front running which has been illegal for decades. Yes, milliseconds, but frontrunning. On proprietary information. Should be an enforcement issue, and I agree it would have been nice if President Trump had addressed it.
“The Flash Boys” by the same guy that wrote Moneyball.
“The Flash Boys” by the same guy that wrote Moneyball.
10% for the big guy. Don’t forget that.
A lot of financial institutions and liberals are going to ‘take it in the shorts’ when AOC and Pocahontas et al. start pushing the legislation.
So what’s to stop Charles Schwab customers trading thru London, Tokyo or Singapore markets ?
Zey have zere vays........................
Some people just like taxes because they're jealous of ingenuity and capacity to turn a profit. They go through life upset they're not the smartest, the fastest, or the richest. Their wives aren't the prettiest, their car sucks, and they live in some dead end job they hate and they can't understand or fathom why they got where they are in life.
People who learned how to apply themselves and take bold risks are "rotters," spoilers," and "parasites."
Taxes are a way of taking those "spoilers" and "parasites" 'down a peg.'
You know these types - blow out someone else's candle to make their own look brighter.
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