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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).
Beijing...................................
That was exactly my first thought.
The rich will get richer, and the poor will get poorer. Congress isn't going to screw wealthy elites, because congress IS wealthy elites.
They reap enormous financial benefits for themselves and their privileged elite investors but add no value to our economy.
lol
The high frequency skim is a fraction of what brokers used to charge. Limit your trading, and it will cost you hardly anything at all.
It has increased the value of firms having clients that trade. Tell the clients how smart they are, promise high returns from day and option trading. And then they’ll churn their own accounts. The HFTs take their scrape, and kick back to the brokers.
One big happy family!
If you would like more information about what’s happening in Oregon, please FReepmail me. Please send me your name by FReepmail if you want to be on this list.
“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.”
I think I found the real reason behind this tax...
I can't help thinking why we she put it this way.
Why couldn't she have just said for "all American working families" ????
If an elected official uses office to steal as much as he or she possibly can, and is brazen enough about it, he or she will do just fine as long as the party branding is right.
Notice ‘Black’ is capitalized...............................................
“But it taxes all transactions. Not surprised you like it.”
Having a bid day? Wife left you? Can’t say I blame her.
I don’t trust this scheme, it would be more reassuring to legislate microtransactions out of business directly rather than pretending to do so and then tout all the money that doing so would raise. Just like the cigarette sin taxes, they promise all this money is going to be raised, but simultaneously insist that people targeted by the tax would change their behavior and avoid the conditions that would encounter the tax.
Surely Wall Street saw this coming, so-called experts (oops Touts) have been spot-on with their MOE of 100%.
Maybe they are thinking of Nationalizing Wall Street. Also, the Oil Industry and any other industry that makes money. It is the CCP model and China Joe should be very familiar with it.
“Limit your trading, and it will cost you hardly anything at all.”
I know, but you’re expecting people here to do math, and that’s too much for at least one idiot on this site.
“If you kept the small rules, you could break the big ones.”
― George Orwell, 1984
We already have long term stock sales and short term sales, the latter being penalized.
>>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.
Ummm.. No. Only a fool would dump a 1,000,000 share market order directly on the market. The quantities on the BBO for GM as I type this are on the order of 3,000 shares, so an 1M share order would spike the market. A large institutional order like that would get broken up algorithmically by the brokers to hide the demand. HSTs have found ways of hunting elephants by detecting that liquidity pool, sure, but that’s hardly the same as “seeing trades moving towards the market” and taking unfair advantage.
Good bye New York!!
effin’ idjits...
“I think I found the real reason behind this tax (the money the feds supposedly get)...”
Agree, and that is a VALID reason to oppose it - the CBO will ‘score’ it based on the assumption that the skimmers will pay it - and that gives Congress the ‘right’ to spend that many.
But the skimmers won’t pay it, they’ll instead take their skills over to Google while closing shop. Most likely, 99% of trades will end, the revenue will never appear, but Congress would have spent it anyway.
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