Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Saturday, Apr 13, 2024

House Republicans move to block financial transaction tax as GameStop furor revives Dems' calls for penalty

House Republicans move to block financial transaction tax as GameStop furor revives Dems' calls for penalty

House Republicans on Wednesday unveiled a bill to block a financial transaction tax after the recent frenetic trading of GameStop shares revived a years-long effort by progressive Democrats to impose a penalty on stock trades.
The proposal, a copy of which was obtained by FOX Business, would prohibit states and municipalities from imposing taxes on transactions.

Rep. Patrick McHenry, R-N.C., the lead Republican on the House Financial Services Committee, and Rep. Bill Huizenga, R-Mich., reintroduced the Protecting Retirement Savers and Everyday Investors Act after Democrats seized onto the GameStop trading frenzy to make the case for a financial transaction tax.

During a House hearing last week to examine the GameStop furor, Rep. Maxine Waters, D-Calif., who chairs the Financial Services Committee, said she is considering such a tax, which is supported by progressive lawmakers, including Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., as well as Reps. Ilhan Omar, D-Minn., and Alexandria Ocasio-Cortez, D-N.Y.

They see it as a way to reduce speculative betting that was behind last month's wild swings in the price of GameStop stock, which surged 1,000% in two weeks after an army of at-home traders put their support behind the stock, betting that share prices would rise even as Wall Street short-sellers gambled the exact opposite.

“A small tax – 0.1% – on each Wall Street trade would reduce high frequency trading, a practice which drains profits from retail investors and benefits only the very rich,” Omar tweeted during the GameStop furor. Omar previously introduced legislation with Sanders calling for taxes of 0.5% on stock trades, 0.1% on bonds and 0.0005% on derivatives.

But critics, including McHenry and Huizenga, say that a financial transaction tax could decrease trading activity, lower earnings and ultimately hurt the average American who's trying to save for retirement. The tax on stock trades is applied each time a financial transaction is conducted, which includes mutual funds – owned by roughly 45% of U.S. households – and pension plans.

“Democrats continue to ignore the facts by pushing a financial transaction tax," McHenry said in a statement. "They claim their state-level FTTs would only be paid by the wealthiest, but Americans saving for their futures across the country would end up footing the bill. These FTTs would penalize Americans saving for retirement, their first home, or their child’s education, all at a time when they can least afford it."

One study from the Securities Industry and Financial Markets Association (SIFMA), an industry trade group, found that a financial transaction tax would cause a “cascade of taxation that will accumulate during the standard operations of a mutual fund portfolio, resulting in significant reductions in overall returns.”

The average mutual fund investor would have to save an additional $600 per year – a 12% increase in savings – or work an additional two years to achieve her retirement goals, the group estimated. If the tax is more than 0.1%, that individual would have to save (or work) more. Investors in an active small-cap equity mutual fund would likely see returns shrink by an estimated 1.62% annually, according to SIFMA.

The GOP lawmakers also argued that it would violate President Biden's campaign promise to not raise taxes on Americans earning less than $400,000 annually.

"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," Huizenga said. "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.”

Imposing a 0.1% tax on stock, bond and derivative transactions would raise an estimated $777 billion over the next decade, according to a 2018 analysis by the nonpartisan Congressional Budget Office.

The nation's debt has been pushed to a record high due to massive amounts of coronavirus relief spending and is poised to hit $30 trillion this year once Democrats pass President Biden's $1.9 trillion stimulus package.

Related Articles

Hong Kong News
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.