WASHINGTON D.C. — When the New York Stock Exchange closed Monday, Gamestop stock was up more than 40% a share, as the retail investor versus hedge fund frenzy continues.
The saga got the attention of Congress who last month held hearings on the matter, and the wild swings and profits being made, brought forth, again, a push from progressive lawmakers for a financial transaction tax.
Proponents believe a 0.1 % tax on stock trades could end high-frequency trading, speculation and generate tens of billions of dollars in revenue per year for other federal programs.
“The Hong Kong stock market imposes 0.2% tax on transactions as a result and sees little high frequency trading, but this hasn’t stopped it from thriving or being the third largest in the world besides New York and London,” U.S. Rep. Rashida Tlaib (D-Detroit) said in defense of the idea during a House committee hearing.
While the White House says they’re studying the idea, critics say it's Main Street, not Wall Street investors who will get hit harder with a stock-trading tax.
“This is going to massively penalize small retail investors who are saving for college, for their kids and for retirement and for buying a home,” U.S. Rep. Bill Huizenga (R-Zeeland) said.
“It's amazing to me that some of my colleagues, apparently think that anyone who has a retirement account, or an investment account of any size must be ‘wealthy’ therefore they're going to go after it and tax it,” Huizenga added.
Rep. Huizenga, who's a member of the House Financial Services Committee, recently introduced legislation that would block states and municipalities from imposing a financial transaction tax.
The discussion of implementing a stock-trading tax is happening at the state level in New York, the NYSE threatened to leave the city if lawmakers passed one.
“All I know is when you tax something, you get less of it and I would like to see more investment, not less investment. I would like to see more savings, not less savings,” Huizenga said.
“We have a special, deep liquid market here in the United States that most other countries do not have around the world. And frankly, I don't want to turn into most countries around the world and strangle that opportunity for these small investors,” Huizenga added.