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).

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Peter DeFazio published this content on 15 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 January 2021 19:52:59 UTC