Democrats push $150B stock tax on Wall Street

A House bill still being drafted aims to raise $150 billion each year to pay for new jobs.

Under a bill being drafted by Democratic Reps. Peter DeFazio (Ore.) and Ed Perlmutter (Colo.), the sale and purchase of financial instruments such as stocks, options, derivatives and futures would face a 0.25 percent tax.

The bill, a copy of which was obtained by The Hill, is titled the “Let Wall Street Pay for the Restoration of Main Street Act of 2009.”

Half of the $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.

The Obama administration and congressional Democrats are looking for ways to create jobs after the nation’s unemployment rate hit 10.2 percent in October and job losses are expected to rise.

House leaders have mentioned the possibility of a tax on stock transactions, but House Speaker Nancy Pelosi (D-Calif.) appeared to raise questions about the approach last week. Pelosi said such a move would need to be done in conjunction with efforts in other countries.

“Obviously, we have to work with leadership on this,” said Leslie Oliver, spokeswoman for Perlmutter. “It has a long way to go, but the idea is to stir debate … We think this is one idea that makes a lot of sense.”

The stock tax measure specifies that tax revenue would need to support jobs that pay at least the median wage in the United States, promotes manufacturing jobs and prohibits any recipient of the $700 billion financial bailout from directly benefiting from the job reserve fund.

The bill aims to exempt retirement accounts from the impact of the tax.

A group of consumer watchdog organizations and labor unions sent DeFazio a letter this week supporting the tax bill.

“Your bill would put Wall Street to work for the public good, by placing a modest securities transaction tax on trades of stocks, options and swaps. A tax on these trades has little impact on the average investor or pension fund because they hold their investments for the long term, but it does disincentivize Wall Street gambling and high-volume short-term speculative trading,” the organizations wrote.

The groups include: Americans for Financial Reform, Public Citizen, the Service Employees International Union (SEIU) and the AFL-CIO, among others.