Rep. DeFazio introduces financial transaction tax

Capital Stock Shares

Legislation aimed at curbing high-speed and speculative financial trading by implementing a three-basis-point transaction tax was introduced Wednesday by Rep. Peter DeFazio, D-Ore.

Mr. DeFazio said at a news conference that the estimated $417 billion that would be raised by the tax over 10 years would go toward funding infrastructure repairs, education and other programs.

“It's too much revenue being left on the table for lawmakers to ignore any more,” said Lisa Gilbert, director of Public Citizen's Congress Watch division, which along with the AFL-CIO, Americans for Financial Reform, Center for Economic and Policy Research, and Communications Workers of America, support the bill, which does not have co-sponsors yet.

“It no longer sounds like a crazy idea,” said Dean Baker, CEPR co-director, at the news conference, adding that ordinary investors, including retirement account holders, would see the cost of the tax offset by reduced trading volume. “The only people who would feel the impact will be the short-term traders and the financial intermediaries,” Mr. Baker said.