In a move that could negatively impact high-frequency traders, Democrats are bringing forward a plan to tax stock, derivative and bond deals. U.S. Rep. Peter DeFazio (D-OR) is spearheading the “Wall Street Tax Act of 2019” bill, with U.S. Rep. Alexandria Ocasio-Cortez (D-NY) as its lead co-sponsor, CNBC reported.
“What we were looking at is if there's a sweet spot when you do a financial transaction tax,” DeFazio told the outlet. The legislator continued, “This would pretty much be a sweet spot. You would be discouraging high frequency trading and this would definitely impede on their business model.”
The tax, according to Joint Committee on Taxation staff estimates, could cause revenues to rise by $777 billion over a period spanning from 2019 to 2028. “The tax on financial transactions would reduce taxable business and individual income,” the Congressional Budget Office said on its website, according to the news outlet. As it stands, the bill is said to have 12 cosponsors at a minimum, and the outlet reported that DeFazio attempted to get a similar law to the floor two years ago, in 2017.
News of the proposal comes after it was reported that in January that Ocasio-Cortez is likely to join the House Financial Services Committee. Katie Porter of California and Rashida Tlaib of Michigan were also expected to join the panel in charge of oversight for Wall Street and the financial services industry, it was reported at the time.
“I am very grateful for the opportunity to sit on this committee as a freshman, and look forward to working under the leadership of @RepMaxineWaters!” Ocasio-Cortez said in a Twitter post on Tuesday (Jan. 15), reported Bloomberg. The legislator wrote in another tweet that she was “looking forward to digging into the student loan crisis, examining for-profit prisons/ICE detention, and exploring the development of public & postal banking. To start.”