Rep. Peter DeFazio Introduces Legislation to Curb Speculative Wall Street Trading and Bolster Main Street
WASHINGTON, D.C.—Rep. Peter DeFazio (D-OR) today introduced legislation that would levy a 0.03 percent tax on transactions of stocks, bonds and derivatives to discourage the same speculative financial trading that led to the 2008 Wall Street collapse and 2010 ‘Flash Crash’. Revenue could be directed to programs that strengthen Main Street American families.
The Putting Main Street FIRST Act: Finishing Irresponsible Reckless Speculative Trading would provide billions of dollars in revenue each year by taxing three basis points, or three pennies for every hundred dollars, on most financial trading including stocks, bonds, and other transactions. According to the Joint Committee for Taxation, the tax would raise $417 billion over ten years, which could be used to fund national priorities such as free higher education or job-creating infrastructure repair.
The legislation is supported by the AFL-CIO, Americans for Financial Reform, the Center for Economic and Policy Research, the Communications Workers of America, and Public Citizen.
“Thanks to the reckless greed of Wall Street over the past few decades, the American economy is a grossly unbalanced playing field,” said Rep. Peter DeFazio. “The only way we can level it is if we rein in reckless speculative financial trading and curb near-instantaneous high-volume trades that create instability in the stock market and our national economy. These financial practices have no intrinsic value, and exist to make a quick buck for already-wealthy speculators. If we want to give middle-class families a fair shot at a strong economy that works for all Americans, we need to put Main Street FIRST.”
“The ‘Putting Main Street First Act’ will help encourage long-term investing, fund badly needed public investment and make our tax code fairer for working people,” said AFL-CIO Director of Policy Damon Silvers.
“Given the massive costs of the financial crisis and its devastating impact on families across the country -- and on the wealth of minority communities in particular -- it is long past time for Wall Street to pay its fair share in taxes, said Lisa Donner, Executive Director of Americans for Financial Reform. “We applaud Representative DeFazio's financial transaction tax proposal; a Wall Street speculation tax would not only help move our financial markets away from dangerous high-frequency trading, but also raise significant revenue to address unmet needs.”
“This tax is a great way to raise money for the federal government by making the financial sector more efficient,” said Dean Baker, Co-Director of the Center for Economic and Policy Research. “The cost of the tax will be fully covered by the savings from reduced trading. This means that the ordinary investor will be left unharmed by this tax. The only people who feel the impact will be the short-term traders and the financial intermediaries.”
“Our Take on Wall Street coalition is determined to end to the finance industry’s practice not paying its fair share of taxes and sticking working families with the bill. We’re proud to join with Congressman DeFazio in putting working families and Main Street first, by setting a small fee on the billions of dollars of Wall Street trade that happen every day. Not only would this raise more than $400 billion to help families and communities, it would put the brakes on risky Wall Street behavior that threatens our economy,” said CWA President Chris Shelton.
“This bill is good policy and good precedent,” said Lisa Gilbert, Director of Public Citizen’s Congress Watch Division. “Not only would taxing Wall Street trades grow revenue, it would stop the sorts of high-speed trading that adds volatility to our markets and increases costs for everyday investors and the public. Reining in Wall Street by stopping dangerous speculation is the right thing to do, and Public Citizen applauds Representative DeFazio and other champions for their support of this critical reform.”