Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

National Nurses United for an International Day of Action, Lafayette Square, Washington, D.C. (Photo: Flickr Glyn Lowe Photo Works, @glynlowe). 

Progressive Tax Takes Aim at Wall Street Transactions, Financial Crashes

"In the current moment of surging support for taxing the wealthy, this sensible Wall Street tax may have a good shot."

Eoin Higgins

Democrats on Tuesday proposed a tax on Wall Street transactions which could stop another financial crash and bring in $777 billion over the next decade. 

"The Wall Street Tax Act would tax the sale of stocks, bonds, and derivatives at 0.1 percent," said Sen. Brian Schatz (D-Hi.), who introduced the bill (pdf) with U.S. Senator Chris Van Hollen (D-Md.) as lead co-sponsor.

"A stock trade of $1,000 would incur a tax of just one dollar," Schatz added.

The bill was also cosponsored in the Senate by Sen. Kirsten Gillibrand (D-N.Y.), who is seeking the Democratic nomination for president, and Sen. Jeff Merkeley (D-Ore.), who is not. 

The House version of the bill was introduced by U.S. Representative Peter DeFazio (D-Ore.) with the support of Representatives Rosa DeLauro (D-Conn.), Raul Grijalva (D-Ariz.), Pramila Jayapal (D-Wash.), Ro Khanna (D-Calif.), Grace Napolitano (D-Calif.), Alexandria Ocasio-Cortez (D-N.Y.), Chellie Pingree (D-Maine), Mark Pocan (D-Wis.), Jan Schakowsky (D-Ill.), and Peter Welch (D-Vt.).

In an opinion piece published Tuesday, Sarah Anderson, the director of the Global Economy Project of the Institute for Policy Studies, said the tax was needed for market stability. Citing the use of high frequency trades by "stock scalpers"—traders who, millions of times a day, use microsecond advantages to drive up stock prices in advance of trades—Anderson argued that the tax could stop those traders from fleeing a volatile market in the case of a downturn; an acceleration of financial disaster known as a "flash crash."

"Even a tiny levy on each trade of stocks, bonds, and derivatives would deliver a heavy blow to high frequency traders, which make huge profits, but on slim margins per trade," wrote Anderson. "For ordinary investors whose portfolios have low turnover rates, the cost would be negligible—like a tiny insurance fee against future crises."

Economist Dean Baker, in a statement from the the Center for Economic and Policy Research (CEPR), concurred.

"At a time when members of Congress are exploring ways to tax the wealthy and fight income and wealth inequality," said Baker, "a financial transactions tax that discourages pointless trading [and] is targeted at the financial industry and frees up resources for other spending, is a welcome policy tool."

On business network CNBC's "Squawk Box"program Tuesday, economist Jared Bernstein called the tax a "progressive revenue raiser."

Anderson put the bill into historical context.

"In a rational political world, Congress would've adopted this type of tax immediately after the 2008 crash, while the wounds of a financial system run amok were fresher and deeper than today," Anderson said. 

That doesn't mean the bill is dead on arrival, she added:

"In the current moment of surging support for taxing the wealthy, this sensible Wall Street tax may have a good shot."


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

This is the world we live in. This is the world we cover.

Because of people like you, another world is possible. There are many battles to be won, but we will battle them together—all of us. Common Dreams is not your normal news site. We don't survive on clicks. We don't want advertising dollars. We want the world to be a better place. But we can't do it alone. It doesn't work that way. We need you. If you can help today—because every gift of every size matters—please do. Without Your Support We Simply Don't Exist.

Architect of Texas Abortion Ban Takes Aim at LGBTQ+ Rights While Urging Reversal of Roe

"Make no mistake, the goal is to force extreme, outdated, religious-driven values on all of us through the courts."

Jessica Corbett ·


Ahead of Canadian Election, Bernie Sanders and Rashida Tlaib Endorse NDP

"Bernie, you have fought courageously for public healthcare, affordable medication, making the rich pay their fair share, and tackling the climate crisis," said party leader Jagmeet Singh. "We're doing the same here."

Jessica Corbett ·


US Urged to End Drone Strikes After Pentagon Says Killing 10 Afghan Civilians Was 'Horrible Mistake'

"That was not a 'mistake,'" said journalist Anand Giridharadas. "War crimes are not oopsies."

Brett Wilkins ·


40+ NYC Activists Arrested for Protests Against Banks Fueling Climate Emergency

"We're sending a message loud and clear that the little action that politicians and greenwashing CEOs have taken so far does not begin to deal with the magnitude of this crisis."

Jessica Corbett ·


FDA Panel Recommends Pfizer Booster Shots for People 65+ and Especially Vulnerable

The scientific advisory committee voted down a recommendation for other adults.

Common Dreams staff ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.


Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo