DeFazio, Perlmutter Drafting New Version of Wall Street Transport Tax

Reps. Pete DeFazio (D-OR) and Ed Perlmutter (D-CO) are working on a
broader version of the former lawmaker’s plan to pay for U.S.
infrastructure investment by imposing a small tax on stock
transactions, despite a note of caution sounded last week by House Speaker Nancy Pelosi (D-CA).

Rep. Ed Perlmutter (D-CO) (Photo: AP)

The new tax proposal differs markedly from legislation that DeFazio released in August, which focused on speculative oil futures trades. As The Hill first reported
today, DeFazio and Perlmutter’s new bill would levy a 0.25 percent tax
on general transactions involving “stocks, options, derivatives and
futures”:

Half of the [bill’s estimated] $150 billion in tax revenue would go toward reducing the
deficit, while the other half would be deposited in a “Job Creation
Reserve” to support new jobs.

The
job fund would be available to offset the additional costs of the 2009
highway bill and other legislation that creates jobs.

DeFazio and Perlmutter’s approach is attracting increasing interest
from fellow House Democrats who have long supported passage of a new
six-year federal transportation bill. Still, the tax proposal’s
prospects with both the Senate and the Obama administration remain
murky.

In a September letter
published by the financial blog Reformed Broker, Sen. Charles Schumer
(D-NY) expressed concerns that a Wall Street transaction tax could
“harm economic recovery efforts by deterring capital investment.”

Treasury Secretary Tim Geithner also shot down the notion of a stock trades tax in Scotland earlier this month, although Perlmutter later told the Wall Street Journal that the White House is “beginning to take a look at this in one fashion or another.”

Before
contending with the Senate and the administration, however, DeFazio and
Perlmutter would need to continue making their case in the House. In a
Thursday press briefing, Pelosi indicated that any infrastructure tax on Wall Street would need to be adopted as part of a broader international effort.