Coalition to Congress: A Financial Transaction Tax Will Harm American Savers and Investors
In our latest Liberty Update, we highlight how a financial transaction tax and new market regulations would punish everyday American investors and retirees. Yesterday witnessed significant movement on the issue, as CFIF joined a broad coalition of 27 organizations representing millions of Americans across the nation in urging Congress to reject any proposal to implement a financial transaction tax on Americans:
An FTT is the latest attempt by the left to take advantage of a ‘crisis’ to implement a massive new tax on the American people. Contrary to their rhetoric, this tax would be borne by the American people, not Wall Street. It would punish investment, leading to lower returns for American retirees and savers and increased market volatility. It fails to raise as much revenue as supporters claim, and has failed everywhere it has been tried in past decades.”
Unfortunately, some in Congress nevertheless invite that potentially catastrophic risk. Yesterday, Senator Chris Van Hollen (D – Maryland) advocated a financial transaction tax during a hearing before the Committee on Banking, Housing, and Urban Affairs. Senator Van Hollen confirmed that Senators Elizabeth Warren (D – Massachusetts) and Brian Schatz (D – Hawaii) stand ready to introduce such legislation, falsely asserting that, “We know that Wall Street has made an art of high-frequency trading and rank speculation that’s fattened the wallets of a few, while putting everyday investors at greater risk.”
But as we noted specifically in our most recent piece on the matter, the exact opposite is true:
Any financial transaction tax will inevitably impact millions of Americans who rely upon investments to sustain their pensions, 401(k) plans, index funds and other retirement accounts. Today, 53% of American households own stocks, while between 80 million and 100 million possess 401(k) accounts. According to one recent analysis from the Modern Markets Initiative, the proposed financial transaction tax could mean a hit of $45,000 to $65,000 to 401(k) owners over the lifetime of their accounts. Accordingly, the suggestion that a new tax on financial transactions won’t punish everyday Americans is flatly untrue.
In fact, the hardest-hit would be those who rely upon public sector employment pensions, such as police, firefighters, teachers and other public servants whose retirement accounts rely heavily on markets for retirement. They stand to lose billions of dollars every year to the proposed tax, meaning significantly reduced savings and retirement incomes.”
Our broad coalition has it right, and Senators Van Hollen, Warren and Schatz have it wrong. A financial transaction tax would sacrifice American consumer and investor wellbeing at the altar of a broader politically motivated agenda.
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