Dems split on stock tax

House Democrats are clashing over a draft bill that would tax financial transactions in an effort to raise $150 billion per year.

Democratic Reps. Carolyn Maloney (N.Y.), Mike McMahon (N.Y.) and Debbie Halvorson (Ill.) are circulating a letter opposed to the stock transaction tax idea. They're squaring off against the tax's main supporters, including Reps. Peter DeFazio (Ore.) and Ed Perlmutter (Colo.).

The 0.25 tax would be levied on stock, futures, derivatives and other transactions. The financial industry strongly opposes the tax and argues it would hurt the economy as it begins to recover.

"The imposition of such a tax would place a huge new tax burden on our fragile economy and could drive up an already high 10.2% unemployment rate. It also may have serious unintended consequences on our financial markets by raising the cost of credit and private investment for businesses and governments alike," McMahon, Maloney and Halvorson wrote in a draft letter. "A tax on stock transactions would affect every single person who owns and invests in stocks from small business owners to senior citizens."

DeFazio and Perlmutter have floated the tax to raise $150 billion per year, half of which would go toward paying down the deficit and the other half would support a job creation fund, according to a draft copy of the bill obtained by The Hill.

Democrats on and off the hill are searching for new ways to create jobs as the unemployment rate continues to rise. DeFazio and Perlmutter called the bill the "Let Wall Street Pay for The Restoration of Main Street Act of 2009."