Two key Republican House members have introduced a bill that would prohibit states from imposing taxes on financial transactions.
Rep. Patrick McHenry, R- N.C., ranking member on the House Financial Services Committee, and Rep. Bill Huizenga, R-Mich., ranking member on the Investor Protection, Entrepreneurship and Capital Markets Subcommittee, unveiled the Protecting Retirement Savers and Everyday Investors Act on Oct. 27.
The bill's introduction comes at a time when lawmakers in New Jersey are considering a proposal that would levy a tax on all stock trades that occur in New Jersey, where the major exchanges house their processing centers. Exchanges, like the New York Stock Exchange and Nasdaq, and groups like the Securities Industry and Financial Markets Association, oppose the proposed tax.
The New Jersey proposal is "effectively a tax on public pensions, charitable foundations and university endowments, which runs counter to many longstanding policies that promote savings and economic growth, including the recently enacted New Jersey Secure Choice retirement program," SIFMA said in a written statement provided during a hearing held by the New Jersey Assembly Financial Institutions and Insurance Committee last month.
In introducing the bill prohibiting such taxes, Mr. McHenry said in a statement that a financial transaction tax, or FTT, will hurt retirement savers. "This bill will protect the everyday investors who would ultimately pay this additional tax on their hard-earned savings — including in their 401(k)s, pensions and college-savings accounts," he said. "As Democrats continue to push their false claim that the FTT is only a tax on the wealthiest, Republicans will continue to fight for middle-class Americans saving for their future."
Brian H. Graff, CEO of the American Retirement Association, voiced support for the bill and said in a statement that a financial transaction tax "is a tax on the retirement savings of hard working Americans. This bill will prevent this Main Street tax which would otherwise be passed on to middle income earners — two-thirds of 401(k) participants make less than $100,000 a year."
With few legislative days remaining and with Democrats controlling the House, it's unlikely the bill will see any movement this Congress.
Historically, Democrats have been open to financial transaction taxes, including a proposal last year from Sen. Bernie Sanders, I-Vt., and Rep. Barbara Lee, D-Calif., to tax of a fraction of a percent on the trades of stocks, bonds and derivatives.
In introducing the bill, called the Inclusive Prosperity Act, Ms. Lee said in a statement that "taxing Wall Street" is not an extreme idea. "It's past time to make sure Wall Street pays their fair share so that we can provide funding for things that make us a better nation like jobs, housing, infrastructure, and college education," she said.