The ranking Republican on the House Financial Services Committee proposed an amendment that would stop the panel from even thinking about taxing trades of stocks, bonds and derivatives.
Representative Patrick McHenry, the ranking Republican on the panel, offered an amendment Thursday that would prevent the committee from considering financial transaction taxes, a proposed new tax on capital markets that is gaining support among Democrats.
The Democratic-controlled panel hasn’t yet voted on McHenry’s amendment but it would likely fail if Chairwoman Maxine Waters called it up. His attempt demonstrates that Republicans are mobilizing against proposals to raise taxes on businesses and the wealthy months before the November election.
A financial transaction tax is among the most popular tax ideas among Democratic presidential contenders. The idea has been embraced by candidates across the ideological spectrum, including Michael Bloomberg, a moderate Democrat and former Republican, and Bernie Sanders, a self-described Democratic socialist. Proponents say the levy would curb unproductive high-frequency trading and speculative bidding in the markets.
(Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)
Most proposals by Democratic presidential candidates call for a financial transaction tax of 0.1% on stocks and bonds, but Sanders has suggested a tax as high as 0.5%.
Republicans say the tax would harm people saving for retirement and investing in the market to save for large purchases, such as homes and school tuition.
“The financial transaction tax, though small for each individual transaction, the weight of such for each transaction, would hurt middle-class Americans and their savings for retirement,” said McHenry of North Carolina. “This is not a tax on the 1%, absolutely not. It is a tax on anyone with any savings.”
Such a tax has no chance of being enacted while Republicans control the Senate and White House. Business groups, including U.S Chamber of Commerce, have also begun lobbying against the idea, which the Congressional Budget Office says could raise about $777 billion over a decade.
© Copyright 2023 Bloomberg News. All rights reserved.