[Congressional Record Volume 162, Number 114 (Thursday, July 14, 2016)]
[Extensions of Remarks]
[Page E1124]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   THE INTRODUCTION OF THE PUTTING MAIN STREET FIRST ACT: FINISHING 
               IRRESPONSIBLE RECKLESS SPECULATIVE TRADING

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                         HON. PETER A. DeFAZIO

                               of oregon

                    in the house of representatives

                        Thursday, July 14, 2016

  Mr. DeFAZIO. Mr. Speaker, yesterday, I introduced H.R. 5745, The 
Putting Main Street FIRST Act: Finishing Irresponsible Reckless 
Speculative Trading.
  The bill would levy a miniscule 0.03 percent tax on stocks, bonds and 
derivatives, which will discourage irresponsible high-speed trades that 
have no intrinsic value and that destabilize the market, which were the 
driving factors of the 2008 financial crisis and the 2010 flash crash.
  How much does a 0.03 percent tax cost per trade? It amounts to 3 
pennies on a $100 trade.
  How much does it raise? The Joint Tax Committee estimates the tax 
would raise $417 billion over ten years.
  These funds can be used to fund national priorities like free higher 
education so college students aren't stuck in never-ending debt. It can 
be used for job-creating infrastructure investments, or other national 
priorities.
  Raising much-needed revenue to help average Americans is a big plus, 
but my primary reason for my bill is to end unhealthy speculation in 
the market and bring it back into balance. My goal is to stop Wall 
Street from gambling with Main Street's money.
  Opponents of a financial transaction tax have already rolled out 
their same tired arguments: American retail investors and retirees 
would get hit with higher administrative fees as brokerages pass the 
cost of the tax down to them.
  The opponents haven't read my bill, or if they have, they are 
ignoring what's in it.
  The fear-mongers have always said a transaction tax will destroy the 
market. The truth is the U.S. had a transaction tax from 1914 until 
1966. In 1932, the transaction tax was raised. When the increase in the 
tax was proposed, various newspaper headlines screamed our markets 
would fail. Here are just two: ``Stocks Tax Called Peril to Exchange'' 
and ``Panic Threat Seen in Taxes.''
  In 1932 the Dow Jones was at a low point of 41. In 1966, the Dow 
Jones was at nearly 1000 points. The sky did not fall.
  The point is the large majority of trades today are made by computers 
with algorithms whose sole purpose is to execute thousands of trades in 
milliseconds to turn a quick buck.
  Flash boys and high-frequency traders go so far as to locate their 
servers as close to an exchange as possible--all to gain a nanosecond 
head start of a trade price. How can average Americans compete with 
that? They can't.
  It's time to stop irresponsible trading, time to level the playing 
field, and it's time to put Main Street FIRST.

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