Two key Republican House members have reintroduced 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, again proposed the Protecting Retirement Savers and Everyday Investors Act on Wednesday.
If states imposed financial transactions taxes, or FTTs, on certain industry participants, including stock exchanges and broker-dealers, the tax would be passed on to out-of-state investors, impacting their abilities to save for retirement or buy their first home, Messrs. McHenry and Huizenga said in a news release.
State lawmakers in New Jersey, New York and Illinois have recently floated FTT proposals.
"The federal government should not be making it harder for Americans to save for their future," Mr. Huizenga said in the news release. "A financial transaction tax would clearly break President Biden's promise to not raise taxes on middle-class families and would negatively impact retirement savers, pensioners, families saving for college and everyday investors. If Washington wants to take a risk, it should try to do more with less by cutting federal spending, instead of taking more money away from Americans investing to build a brighter and more secure future."
Kenneth E. Bentsen Jr., president and CEO of the Securities Industry and Financial Markets Association, endorsed the bill in a statement. "SIFMA strongly opposes the imposition of an FTT due to the cost to retirement savers, investors, businesses and the economy," he said. "An FTT is nothing more than a sales tax on investors and it runs counter to many longstanding policies promoting savings and economic growth."
The bill is unlikely to move in the Democrat-controlled House.
Historically, Democrats have been open to financial transaction taxes, including a proposal in 2019 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.