A group of Democratic lawmakers has introduced legislation that would impose a tax on Wall Street securities transactions.
H.R. 4191, the Let Wall Street Pay for the Restoration of Main Street Act, would apply a tax to trades of stocks, futures contracts, swaps, credit default swaps and options. The measure was proposed by Rep. Peter DeFazio, D-Ore. The American taxpayers bailed out Wall Street during a crisis brought on by reckless speculation in the financial markets, he said in a statement. This legislation will force Wall Street to do their part and put people displaced by that crisis back to work.
Sen. Tom Harkin, D-Iowa, plans to introduce similar legislation in the Senate next week. There is no question that Wall Street can easily bear this tax, he said.
The securities transaction tax would impose an 0.25 percent tax on stock transactions; an 0.02 percent tax on futures contracts, swaps and credit default swaps; and an unspecified tax on options.
The tax would be refunded for tax-favored retirement accounts, mutual funds, education savings accounts, health savings accounts, and the first $100,000 of transactions annually that are not already exempted. Half the revenue generated by the transaction tax (approximately $75 billion) would be deposited in a Job Creation Reserve fund. The Surface Transportation Authorization Act of 2009, another bill intended to create jobs, would be partially funded through the tax. The second half of the revenue generated by the transaction tax (approximately $75 billion) would be used to reduce the deficit.
The head of the Financial Services Roundtable said he opposed the bill. Nearly every American would be impacted by a new transaction tax, no matter how small it is, said president and CEO Steve Bartlett in a statement. It would reduce the investment accounts for all Americans and erect a roadblock to capital flowing into the system thereby limiting job growth and productivity. The proposal will expose Americans to double taxation once when they buy a share of stock and once when they sell it."
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