Hoyer Opposes Tax on Financial Transactions Because It Isn’t Globally Coordinated Yet
December 8, 2009House Majority Leader Steny Hoyer (D-Md.) said he does not support a proposed tax on financial transactions, such as stock trades and futures contracts, because it has not been globally coordinated yet. However, he agreed with House Speaker Nancy Pelosi (D-Calif.) that such a transaction tax should be worldwide.
Hoyer explained that the only way the tax would bring the government any money would be to coordinate it among the world’s major economic powers, or among people who do their stock trading on foreign exchanges. Hoyer made his remarks on Tuesday, during his weekly press briefing.
Concerning Pelosi’s view on the proposed tax, Hoyer said, “What she has said to me, and what we have discussed, is that the consideration of a financial, of a transaction fee would be contingent upon having a global treatment which was compatible [between countries], so that you didn’t simply have a transaction tax here and then find – because now they’re done on computers so it’s not like you’ve got to move an office – you start transacting your business through London or Hong Kong or Singapore or whatever.”
A transaction tax would only be “workable,” said Hoyer, if it were globally coordinated, which it currently is not.
“In that context, I tend to agree with her [Pelosi],” Hoyer explained. “Having a transaction tax or fee solely applied to the United States probably would not be a workable scenario.”
When CNSNews.com asked whether he supported the American version of the tax (H.R. 4191), Hoyer said “not at this time, because we don’t have the [global] context in which I think that can be successful.”
Pelosi endorsed the global transaction tax last week, saying it would go a long way towards paying for a second economic stimulus package in the United States.
Speaking to reporters on Dec. 3, Pelosi said the idea of a global transaction tax had “a great deal of merit,” explaining that the public wants to see Wall Street start “pitching in” to help fund government stimulus spending.
“I believe that the transaction tax still has a great deal of merit,” Pelosi told reporters. “I think there would be a market for it among the American people to say that we are all participating in the economic prosperity of our country, and we are all pitching in to continue that prosperity.”
The American version of the tax, written by Rep. Peter DeFazio (D-Ore.), would levy a tax of up to 0.25 percent on all stock trades, futures contracts, swaps, and stock options in hopes of raising $150 billion per year, which the government could use on stimulus spending and deficit reduction.
“To restore Main Street America, a small securities tax on Wall Street should be invested in job creation for Main Street,” the bill states. “This transfer tax would be assessed on the sale and purchase of financial instruments such as stocks, options, and futures. A quarter percent (0.25 percent) tax on financial instruments could raise approximately $150,000,000,000 a year.”