All Republican Financial Services Members Sign Resolution Detailing Devastating Impacts of Democrats’ Proposed Federal Financial Transaction Tax
Washington,
March 17, 2021 -
Today, every Republican Member of the House Financial Services Committee signed onto a resolution condemning attempts to impose a federal financial transaction tax (FTT) on investors, savers, or market intermediaries. With growing calls from Democrats to implement FTTs—to either hamper retail investors following the GameStop situation or to pay for their massive spending priorities—Republicans are working to ensure this harmful tax proposal does not become reality.
“Progressives’ attempts to pass off the FTT as an undetectably small tax on the wealthiest investors is categorically false,” said Ranking Member Patrick McHenry (NC-10). “This tax—along with Democrats’ myriad of additional tax hikes—will harm Americans saving for their retirement, their child’s education, and their pension funds. This once fringe idea, which has already failed around the globe, is now a very real threat. Jobs will be lost, businesses will have less access to capital, and workers will lose out on retirement savings. We have to speak out against this bad idea and Republicans will continue to fight to stop it.”
Read the resolution here.
- A Federal financial transactions tax would:
o Be a new, additional tax on top of already-existing income taxes, capital gains taxes, and corporate taxes.
o Hurt all market participants, including everyday investors who are saving for retirement or their child’s education, as well as everyday Americans’ pension funds and savings because a financial transactions tax is applied each time a transaction is conducted.
o Harm worker wages and destroy American jobs by increasing the cost of capital and reducing productivity.
o Reduce liquidity in the capital markets.
- A typical mutual fund investor would likely lose multiple years’ worth of savings to 0.1 percent Federal financial transactions tax and could lose decades worth of savings to a 0.5 percent financial transactions tax.
- Pension fund expenses would increase, and their returns would decrease, exacerbating the current problems with underfunded pensions and making it less attractive for governments and companies to offer pension plans.
- The Congressional Budget Office has found that a proposed financial transactions tax would ‘‘immediately lower the value of financial assets.”
- Not only will a Federal financial transactions tax slow economic growth, other countries’ failures at implementing a financial transactions tax demonstrate the tax will not raise expected revenue and will lead to an exit of trading activity for more favorable jurisdictions.
Read a letter signed by almost 30 groups and activists led by Americans for Tax Reform calling on Congress to reject proposals to implement a financial transaction tax.
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