As part of an effort to address what he called the “chronic problem” of stagnant middle-class incomes, a top House Democrat has proposed imposing a fee on financial market transactions to fund tax relief for U.S. workers and their families.
Unveiling an “action plan” for the economy, Rep. Chris Van Hollen from Maryland, the top Democrat on the House Budget Committee, said new tax benefits for working Americans should include a so-called paycheck bonus tax credit designed to cut $2,000 a year off the tax bills of couples making less than $200,000 a year.
“This proposal attacks the chronic problem of stagnant middle-class incomes from both directions—it promotes bigger paychecks and lets workers keep more of what they earn,” the congressman said of his plan “to grow the paychecks of all, not just the wealthy few.”
The benefits, he said, could be funded by “changing the ways our current tax code is rigged in favor of those who make money off of money, and against those who make money from work.”
In particular, the plan proposes a “tiny” financial market trading fee that would “raise tens of billions of dollars a year” as well as “curb the kind of financial speculation that creates no value for the economy.” The European Union is moving toward a trading fee of 0.1% that would raise as much as $44 billion per year, Van Hollen noted.
“As the EU nations join the many other countries with financial centers that have trading fees, there is no reason why the United States should not also move forward in concert with others,” he argued.
House Budget Committee chair Tom Price, a Republican from Georgia, told MarketWatch he welcomed Van Hollen’s ideas but Congress “should focus on fundamental tax reform that builds a foundation for job creation and economic growth.” He has authored legislation to stop financial transaction taxes.
“The plan has little chance of getting through the Republican-controlled Congress,” MarketWatch reported. “But it is getting attention as a bold proposal just as budget season is due to start heating up on Capitol Hill.”
Image: The Democratic Caucus