Democrats Attack Wall Street Traders
Policy making Democrats that are drafting their party’s convention platform are proposing to tax stock trades on US exchanges as the party steps into the modern financial markets.
“We support a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading, which has threatened financial markets,” according to a draft released Friday of the proposed Democratic platform, a summary of goals the party wants to promote.
“We acknowledge that there is room within our party for a diversity of views on a broader financial transactions tax.”
The proposal is a nod to the agenda of Democratic Presidential candidate Bernie Sanders (D-VT), and an effort to appeal to his supporters.
The draft platform’s reference to “a broader financial transactions tax” is a proposal from the Senator, who challenged Hillary Clinton for the party’s nomination but who now says he will vote for her.
The full Democratic Platform Committee will meet on 8-9 July to vote on approving the platform, which would then be up for debate and adoption at the party’s convention later this month in Philadelphia.
The proposal did not specify the size of the tax or exactly what would be taxed.
Exchanges and traders argue financial transaction taxes would sap liquidity from markets because they would wipe out the already razor-thin profit margins on trading.
A proposed trading tax in Europe looks doomed because of such concerns.
Terry Duffy, the Executive Chairman of Chicago-based market operator CME Group Inc.(NASDAQ:CME), recently called a plan to tax trades in Illinois “ridiculous.”
Hillary Clinton, the presumptive Democratic nominee for US President, has targeted high-frequency traders, saying they have “unnecessarily placed stress on our markets, created instability, and enabled unfair and abusive trading strategies,” according to her website.
Senator Sanders has proposed taxes on all stock trades, imposing a rate of 0.5% for stocks, 0.1% for bonds and 0.005% for derivatives.
The tax would be imposed on “Wall Street investment houses, hedge funds, traders and other speculators,” according to Senator Sanders’s campaign website.
“If those Wall Street investment houses chose to pass the tax along to investors, this plan would provide a tax credit to individuals making under $50,000 and couples making under $75,000 to ensure that they would not be impacted.”
Trading volumes could shrink by at least 50%, cutting exchanges’ revenues by 75% or more.
|NASDAQ:CME||96.33||1 Jul 2016||-1.07||97.01||97.56||96.01||1,564,300|
|HeffX-LTN Analysis for CME:||Overall||Short||Intermediate||Long|
|Bullish (0.27)||Neutral (0.21)||Neutral (0.23)||Bullish (0.36)|
Have a terrific 4th of July.
Latest posts by Paul Ebeling (see all)
- St. Louis, Missouri, the Most Dangerous City in America - October 26, 2016
- Enzo Ferrari’s Namesake Supercar, the F40 - October 26, 2016
- Dubai’s Ruler Receives $1.22-M in UK Farming Subsidies - October 25, 2016