Schatz Reintroduces Bill To Tax Wall Street, Reduce Economic Inequality
0.1% Transaction Tax Will Curb Dangerous High Frequency Trading, Bring In $752 Billion In New Federal Revenue Over 10 Years; While Working Families Struggled During Pandemic, American Billionaires Have Gained More Than $1 Trillion In Wealth
WASHINGTON – Today, U.S. Senator Brian Schatz (D-Hawai‘i) reintroduced legislation to create a new progressive tax on financial transactions that would curb high risk trading practices, reduce economic inequality, and generate $752 billion in new federal revenue over the next decade.
“During the pandemic, Wall Street has cashed in on high-risk trades that add no real value to our economy and leave working families behind. We need to curb this dangerous trading to reduce volatility in the markets and encourage investment that can actually help our economy grow,” said Senator Schatz. “By raising the price of financial transactions, we can make our financial system work better while bringing in billions in new revenue that we can reinvest in our workers and our communities.”
High-volume, speculative trading is driving the disconnect between the financial system and the real economy, as it adds no real economic value and disproportionately benefits those at the top. The overwhelming majority of stocks are owned by the wealthiest Americans, who have reaped massive profits from trading on Wall Street as the markets surged to record highs over the last year. The result has been an uneven economic recovery: while workers have lost their jobs, fallen behind on rent, and lacked enough food for their families, America’s 660 billionaires saw their wealth grow by more than $1 trillion since the start of the pandemic.
The Wall Street Tax Act would create a 0.1% tax on each sale of stocks, bonds, and derivatives, which will discourage unproductive trading and redirect investment toward more productive areas of the economy. The new 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 would be exempted.
The legislation is cosponsored by U.S. Senators Chris Van Hollen (D-Md.), Elizabeth Warren (D-Mass.), Kirsten Gillibrand (D-N.Y.), Jeff Merkley (D-Ore.), and Sheldon Whitehouse (D-R.I.). U.S. Representative Peter DeFazio (D-Ore.) introduced a companion bill in the House in January.
The Wall Street Tax Act is supported by 68 organizations, including: the AFL-CIO, American Federation of State, County and Municipal Employees (AFSCME), American Federation of Teachers (AFT), American Sustainable Business Council, Demos, Economic Policy Institute, International Brotherhood of Teamsters, Main Street Alliance, National Association of Consumer Advocates, National Consumers League, Our Revolution, Oxfam America, Public Citizen, Service Employees International Union (SEIU), the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), and United for a Fair Economy. A full list of groups is available here.
The full text of the bill is available here.