Congresswoman Barbara Lee, D-Calif., and Senator Bernie Sanders, I-Vt., re-upped the Tax on Wall Street Speculation Act of 2023 last week, their financial transaction tax (FTT) bill routinely introduced in recent years by the octogenarian senator from Vermont.
While the duo said it targets speculative, high-frequency trading, how and how much the new bill would impact pensions and workplace retirement plans remained unclear.
“This tax would fall primarily on wealthy high-frequency traders who make up [50% to 60%] of all U.S. market trading.],” Lee and Sanders said in a statement. “For ordinary investors, this tax would amount to less than typical pension management fees and would not harm middle-income savers who invest through pensions or mutual funds.
However, the American Retirement Association’s Government Affairs Committee noted that other than references to individual investor applications, the statement did not include specific pension/mutual fund exclusion language.
The Tax on Wall Street Speculation Act would enact a financial transaction tax of 0.5% on the trading of equities, 0.1% tax on the trading of bonds, and 0.005% on the trading of derivatives and other financial instruments.
While official scoring is not yet available, the sponsors claimed economic analysis on the proposal estimated it would raise $220 billion per year or “well over $2 trillion over 10 years.”
Sanders originally introduced the bill as a response to bailouts Wall Street received in the financial crisis of 2008 and would use the revenue to make public college and university tuition free.
“Let us never forget: Back in 2008, middle-class taxpayers bailed out Wall Street speculators whose greed, recklessness, and illegal behavior caused millions of Americans to lose their jobs, homes, life savings, and ability to send their kids to college,” said Senator Sanders. “Now that giant financial institutions are back to making record-breaking profits while millions of Americans struggle to pay rent and feed their families, it is Wall Street’s turn to rebuild the middle class by paying a modest financial transactions tax.”
“Since 1985, Wall Street bonuses have surged by 1,165%, even as wages have stagnated for most Americans, Lee added. “It is past time for Wall Street to pay society back for the incredible damage it did in 2008—and continues to do—to the middle class of this country.”
Previous Versions
In 2021, Lee, Sanders, and Senator Kirsten Gillibrand, D-N.Y., similarly introduced the Tax on Wall Street Speculation Act along with and 10 House Democrats. In 2019, Senators Chris Van Hollen, D-Md., and Brian Schatz, D-Hawaii, and Rep. Peter DeFazio, D-Ore., introduced the Wall Street Tax Act.
"It's called the Wall Street Tax Act, but it's really a Main Street savings attack," Brian Graff, CEO of the American Retirement Association, said of the latter at the time.
Several states and municipalities, most notably New Jersey, proposed their own financial transaction tax legislation, prompting two Republican members of the House to introduce legislation in 2020 meant to block such moves.
