Senate Dem planning legislation to tax stock trades

Senate Dem planning legislation to tax stock trades
© Anna Moneymaker

Sen. Brian SchatzBrian Emanuel SchatzSchumer seeks focus on health care amid impeachment fever CNN catches heat for asking candidates about Ellen, Bush friendship at debate NBA draws bipartisan backlash over China response MORE (D-Hawaii) said in a new interview that he is planning to introduce legislation next week proposing a tax on stock market trades.

Schatz told Vox his bill could raise $800 million over a decade and help curb "nefarious" behavior in the market.

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“Roughly half of the 8 billion daily trades now are high-frequency trades, and that is increasing volatility in the market. It is allowing a certain category of traders to essentially skim profit off the top,” Schatz said. “And on a more basic level, it is turning the stock market into a true casino, in which you are making a bet that has very little to do with the fundamentals of a company.”

Schatz added that the federal government "has a revenue problem" and said his proposal is "among the most popular ideas to generate significant revenue."

Under the legislation, sales of stocks, bonds and derivatives would be taxed at a 0.1 percent rate, according to Vox.

Schatz told the news outlet that the legislation is an attempt to regulate high-frequency trading, an algorithm-driven process that investors use to react to market moves quickly and make trades in seconds.

“High-frequency trading is a real risk to the system, and it screws regular people; that’s the main reason to do this,” Schatz said. “If in the process of solving that problem we happen to generate revenue for public services, that’s an important benefit, but that’s not the main reason to pass this into law.”