DeFazio, Perlmutter Drafting New Version of Wall Street Transport Tax
Reps. Pete DeFazio (D-OR) and Ed Perlmutter (D-CO) are working on a broader version of the former lawmaker’s plan to pay for U.S. infrastructure investment by imposing a small tax on stock transactions, despite a note of caution sounded last week by House Speaker Nancy Pelosi (D-CA).
The new tax proposal differs markedly from legislation that DeFazio released in August, which focused on speculative oil futures trades. As The Hill first reported today, DeFazio and Perlmutter’s new bill would levy a 0.25 percent tax on general transactions involving "stocks, options, derivatives and futures":
Half of the [bill’s estimated] $150 billion in tax revenue would go toward reducing the
deficit, while the other half would be deposited in a “Job Creation
Reserve” to support new jobs.
The job fund would be available to offset the additional costs of the 2009 highway bill and other legislation that creates jobs.
DeFazio and Perlmutter’s approach is attracting increasing interest from fellow House Democrats who have long supported passage of a new six-year federal transportation bill. Still, the tax proposal’s prospects with both the Senate and the Obama administration remain murky.
In a September letter published by the financial blog Reformed Broker, Sen. Charles Schumer (D-NY) expressed concerns that a Wall Street transaction tax could "harm economic recovery efforts by deterring capital investment."
Treasury Secretary Tim Geithner also shot down the notion of a stock trades tax in Scotland earlier this month, although Perlmutter later told the Wall Street Journal that the White House is "beginning to take a look at this in one fashion or another."
Before contending with the Senate and the administration, however, DeFazio and Perlmutter would need to continue making their case in the House. In a Thursday press briefing, Pelosi indicated that any infrastructure tax on Wall Street would need to be adopted as part of a broader international effort.