Legislation was introduced on Wednesday to impose a financial transaction tax on the trading of stocks, bonds and derivatives. The measure would reduce gambling on Wall Street, encourage the financial sector to invest in the productive economy, and significantly reduce the deficit without harming average Americans. "This bill offers us a clear choice. We can balance the budget on the backs of working Americans and senior citizens on fixed incomes or we can ask the gamblers on Wall Street to pay a little bit more in taxes," said Sen. Bernie Sanders, a cosponsor of the bill.
Under the proposal, there would be a speculation fee of 0.03 percent on credit default swaps, derivatives, stocks, bonds, and other financial transactions. It would yield about $200 billion in new revenue over the coming decade. The lead sponsor in the Senate is Tom Harkin. Rep. Peter DeFazio filed companion legislation in the House.
Some of the largest and most profitable financial institutions in this country now pay little or nothing in federal income taxes. Last year, Bank of America received a $1.9 billion tax refund from the IRS, even though it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of more than $1 trillion. Citigroup made more than $4 billion in profits last year but paid no federal income taxes, even though it received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. And, in 2008, Goldman Sachs paid only 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received a bailout of more than $800 billion from the Federal Reserve and U.S. Treasury Department
"Enough is enough," Sanders said. "At a time when we have a record-breaking national debt and unsustainable federal deficit, the very least we can do is demand that Wall Street pay its fair share.