Lawmakers Weigh a Wall Street Tax
By JOHN D. MCKINNON
WSJ
WASHINGTON—Lawmakers are considering a financial-transactions tax that takes aim at Wall Street to help Main Street. But the tax could wind up striking others, too, including pension funds, commodity-dependent businesses, and even ordinary investors.
Congressional advocates describe the new tax as a matter of fairness: Taxpayers bailed out Wall Street, so Wall Street must help rebuild the economy and shore up the government's shaky finances. Some experts say the tax also might reduce market volatility.
Supporters say the hit for typical individuals and even most institutional investors is likely to be light, thanks to the tax's relatively low rates and generous exemptions. The plan would assess a tax on trades in many kinds of financial assets. The rate for stock trades would be 0.25%, or $250 on a $100,000 transaction. The rate would be less—0.02%—for trades of options, futures and other derivatives.
The law would provide a $250 tax credit, effectively exempting everyone from the first $100,000 of all stock trades. And purchase and sale of mutual-fund shares would be exempt no matter how large, as would trading of assets held within personal savings accounts such as a 401(k).
(More here.)
WSJ
WASHINGTON—Lawmakers are considering a financial-transactions tax that takes aim at Wall Street to help Main Street. But the tax could wind up striking others, too, including pension funds, commodity-dependent businesses, and even ordinary investors.
Congressional advocates describe the new tax as a matter of fairness: Taxpayers bailed out Wall Street, so Wall Street must help rebuild the economy and shore up the government's shaky finances. Some experts say the tax also might reduce market volatility.
Supporters say the hit for typical individuals and even most institutional investors is likely to be light, thanks to the tax's relatively low rates and generous exemptions. The plan would assess a tax on trades in many kinds of financial assets. The rate for stock trades would be 0.25%, or $250 on a $100,000 transaction. The rate would be less—0.02%—for trades of options, futures and other derivatives.
The law would provide a $250 tax credit, effectively exempting everyone from the first $100,000 of all stock trades. And purchase and sale of mutual-fund shares would be exempt no matter how large, as would trading of assets held within personal savings accounts such as a 401(k).
(More here.)
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