Senator Bernie Sanders a Democrat of the State of Vermont, Senator Kristen Gillibrand a Democrat of the State of New York, and Congresswoman Barbara Lee a Democrat from the State of California, each introduced the Prosperity Act. This proposed bill “imposes a tax of a fraction of a percent on the trades of stocks, bonds, and derivatives. This tax on Wall Street speculation, also known as a financial transaction tax, is estimated to generate up to $2.4 trillion in public revenue from wealthy investors over 10 years. An added benefit of the proposed tax is deterring the high-frequency trading that increases the instability of the financial sector and produces no economic value.” According to a press release from Sanders office.
Sanders’ press release continues, “Wall Street enjoys record-breaking profits despite its role in triggering the financial crisis of 2008. The top 400 richest Americans now own more wealth than 150 million Americans—60 percent of the country. Meanwhile, a typical middle-class family in America has seen its net worth decline by 30 percent from 2007 to 2016. More than 1,000 economists have endorsed a tax on financial speculation, and 40 countries currently impose the tax, including Britain, which first instituted the tax on stock trades in 1694.”
“While the top 23 banks in America received over $20 billion in tax breaks last year as a result of the Trump tax plan, hundreds of thousands of young people are unable to go to college because they can’t afford it, 34 million Americans have no health insurance, one out of five Americans can’t afford to buy the medicine prescribed by their doctors, over 40 million Americans are living in poverty, we have the highest childhood poverty rate in the developed world and life expectancy in the U.S. has gone down for the third year in a row,” said Sanders. “It is long past time for Congress to rein in the recklessness of Wall Street billionaires and build an economy that works for all Americans.”
Both Sanders and Gillibrand are currently running for President in the Democratic primary.
The idea of a financial transaction tax has been on the wish list of the far left in America for years.
The idea received the backing of the new darling of the far left, Congresswoman Alexandria Ocasio-Cortez, who backed the idea in March.
She co-sponsored a similar bill called the “Wall Street Tax Act of 2019”. While it received publicity for a couple days, the bill has languished and does not appear headed anywhere.
Both Ocasio-Cortez and Sanders call themselves socialists and have made taking on big business and Wall Street major parts of their platforms.
While a financial transactions tax would be a disruptive force to traders- particularly day traders and high frequency traders- this proposed bill has no hope of becoming law.
While it may pass the House where Democrats are a majority, it has no hope of passing the Senate where Republicans are in the majority.
Furthermore, even if it ever passed both chambers, would veto it and it would need two thirds votes in both chambers to then become law.