FOR IMMEDIATE RELEASE:
December 3, 2009
KAGEN SAYS WALL STREET MUST HELP OUT MAIN STREET
(WASHINGTON, DC) Congressman Steve Kagen, M.D. is going after Wall Street speculators and making them pay their fair share of our economic recovery. Kagen today announced the “Let Wall Street Pay for the Restoration of Main Street Act of 2009” to charge a fee on certain securities transactions to fund job creation and debt reduction. The Congressman is an original co-sponsor of the legislation.
“We rescued Wall Street, and now it’s time for Wall Street to return the favor,” said Kagen. “This bill would create a transfer fee that would be aimed at the speculators in the marketplace and make certain that Wall Street participates in the rebuilding of America’s economy.”
The bill will charge a transfer fee of 0.25%, or one quarter of one penny, of trading value for stock transactions. To ensure the fee is appropriately targeted to speculators and has no impact on the average investor and pension funds, the tax will be refunded for tax-favored retirement accounts, mutual funds, education savings accounts, health savings accounts and the first $100,000 of transactions annually that are not already exempted. Futures contracts, swaps, credit default swaps and options will be charged at a rate of 0.02%.
“There is forty seven trillion dollars of trading – tiny amounts of stock traded in fractions of a second – that is socially useless. Wall Street must help to payoff our debts and generate the jobs we need to work our way back into prosperity,” said Kagen.
Half the revenue generated by this transaction fee, approximately $75 billion, will be deposited in a Job Creation Reserve to fund the creation of good paying jobs and put Americans back to work rebuilding our nation. The second half will be used to directly reduce the debt.
The United States had a transfer fee from 1914 to 1966. The Revenue Act of 1914 levied a 0.2 percent fee on all sales or transfers of stock. In 1932, Congress more than doubled the amount (0.4%) to help overcome the budgetary challenges during the Great Depression and WWII. Austria, Belgium, China, Denmark, France, Hong Kong, India, Korea, Switzerland, Taiwan and the United Kingdom have a similar transaction fee in place. Keynes and Nobel Prize winners Paul Krugman, Joseph Stiglitz and James Tobin have supported financial transactions fees in the U.S.
Kagen participated in a press conference today to announce the legislation with Senator Tom Harkin and Reps. Bruce Braley (IA-01), Peter DeFazio (OR-04), Michael Arcuri (NY-24), Betty Sutton (OH-13) and Ed Perlmutter (CO-07).