H.R.1068 - Let Wall Street Pay for Wall Street’s Bailout Act of 2009

To amend the Internal Revenue Code of 1986 to impose a tax on certain securities transactions to the extent required to recoup the net cost of the Troubled Asset Relief Program. view all titles (3)

All Bill Titles

  • Popular: Let Wall Street Pay for Wall Street’s Bailout Act of 2009 as introduced.
  • Official: To amend the Internal Revenue Code of 1986 to impose a tax on certain securities transactions to the extent required to recoup the net cost of the Troubled Asset Relief Program. as introduced.
  • Short: Let Wall Street Pay for Wall Street's Bailout Act of 2009 as introduced.

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  • sddall 02/20/2009 6:27am
    Link Reply
    + -1

    This tax will undoubtedly affect the number of shares traded on an absolute basis, thus reducing liquidity – a necessary ingredient in the effective pricing of assets. It’s the complete lack of liquidity, for example, which made collateralized mortgage obligations effectively worthless.

    The body of the bill suggests that such a tax would have a negligible impact on the average investor. I beg to differ. For example, a $10,000 trade (or approximately 100 shares of stock in Apple, Inc.) would increase the cost of a round trip transaction by $50. 100 shares is generally considered to be a minimum size for a trade, which would devastate any small business executing even a handful of similar trades each day.

    As you can see, while this bill may sound good on the surface, the effects, if it is passed, will reach anyone who wants to invest their money and will ruin many small business people who are not at fault for this distressing situation all Americans are struggling through.

  • Anonymous 02/20/2009 9:30am

    I’m an active trader in addition to having a day job as an engineer. With 100k in an account I may do $2 mil in transactions doing 20 trades a year (active trader - right). That will cost me $10k in taxes, are you kidding?? That’s 10% of my equity. At this point I am ready to take all my money out of the markets, banks etc. buy physicals and bury them in my backyard.

  • Anonymous 02/21/2009 2:16pm

    Wall Street will not pay anything for this. The brokers, mutual funds, pensions, insurance companies, and banks will simply pass this cost on to Main Street. Millions of retirees and middle class workers’ retirement funds will grow less, and losses will be enhanced. The spendable funds of these average citizens will be affected. Not Wall Street.

  • Anonymous 02/21/2009 2:17pm

    Does Congress have a web site where people can comment on bills like this?

  • Anonymous 02/21/2009 2:52pm

    Yes. Click thyis link and sign the petition.

  • Anonymous 02/22/2009 7:18pm

    News Flash- London or Hong Kong to become new financial center of the world as all active trading goes overseas to avoid paying taxes on another idiot Congressman’s clueless idea of how things work.

  • Anonymous 02/25/2009 1:22pm

    It’s not the active trading in the securities that caused the credit crisis. The fault lie with the WS firms who originated these debt-related securities and derivatives and sold them to investors. This is the third major debt underwriting scandal in the last 20 years.

  • Anonymous 02/26/2009 6:25am

    As a CPA specializing in trader taxation, I have clients whose 1099s easily exceed $50M in a year. Adding $62,500 in taxes onto their proceeds will basically remove them, and millions of other small players, from the market, thereby reducing liquidity. So the little guys are supposed to pay for Wall Street. Brilliant, let’s invent new taxes to fix the problem!

  • Anonymous 02/26/2009 7:52pm

    This started with Congress trying to control commodities. It began with food and farming and overseas aid and went on to gas, which we don’t have to pay for anymore because Congress said we pay too much and suddenly prices dropped.

    The securities were originally the mortgages that ACORN and Obama sued over and mortgages were free for everyone. So, since ACORN and Obama guaranteed these mortgages, they were sold overseas and guaranteed.

  • GunnyG 02/27/2009 9:13am

    More liberal attack on the economy.

  • Anonymous 03/02/2009 9:07am

    The private investor has been informed that the old buy and hold strategies espoused in the 1990s are dead. There are now many ordinary middle class people who have decided not to sit idly by and let others lose their money and are working hard to learn to invest on their own.

    And as is always the case, where there are people working hard to better themselves, our government is always there to make sure they are penalized for their efforts.

  • dgompert 03/02/2009 9:31am

    This bill doesn’t make Wall St. pay for Wall St. in the slightest. The bigger players, such as hedge funds, will simply move their activities off the exchanges and/or shore to avoid the tax. In addition the way the bill appears to be constructed it poses an unusually high tax on Options since it is based on Notional Value of the transaction. That will only serve to cause investors to take on more risk as the costs of protecting positions will increase. This will cause more forced liquidations of equity positions placing an additional drag on prices in a lower liquidity environment. Equity Markets aren’t to blame for this mess, they’re the victims. Haven’t they suffered enough?

  • Anonymous 03/03/2009 12:08pm

    Peter DeFazio:

    This guy should be fired, ASAP.
    If his financial madness gets the light of day, I’m done with the Dems, Oregon, and any other entity affiliated. I will never spend another penny in Oregon if this bill passes, and I will never vote for a democrat again.

    Truly yours,
    Support American Business

  • Anonymous 03/03/2009 10:58pm

    You Can’t be seriously considering this! This bill would virtually dry up liquidity in ALL markets. Liquidity is the only constant that traders can count on. It would be VERY dertimental to the marketplace as a whole. It would sideline an enormous amount of investors, when the whole world needs investments like never before. The recession would turn to a DEEP depression virtually overnight. People seem to forget that Wall Street and Main Street are really one in the same. What affects one will ultimately affect the other.
    Concerned Citizen,
    Newport, TN

  • USSAmerican 03/04/2009 1:25am

    As a consultant in the financial industry I am convinced that this Bill will result in the end of the US Markets as we know it. This tax will add more of an expense to the average portfolio than the commissions charged by the brokers. Wall St. has already sent a message to Washington with a drop of more than 25% since President Obama took office. Ignoring this message will put the world markets in a tail spin. I urge our leaders to vote NO on H.R. 1068

  • dnj 03/04/2009 8:11am

    LAst time I checked, I am NOT Wall Street. I am just a mother trying to grow her kids’ college tuition accounts and take control of our medical care so we can keep the government out of it. As a beginner, I can only trade with $1,000 at a time. But its working, slowly but surely. And this bill would mean that I can’t trade and be responsible for my own IRA, etc. Does it even make a distinction between the tax status of accounts being traded? Will this apply to trading my IRA or 401K?

  • MadTrader 03/08/2009 8:14am

    This Bill would definitely end the US Stock market as we know it. I am an active trader and average well over 50 million in transaction a year would give me a tax bill of $125,000. If this Bill looks like it has any chance to pass I will put all of my capitol together and go short this market. It is a bet that is sure to win. Amazing that there are such fools in our Government such as U.S. Congressman Peter DeFazio. A true American idiot!

  • Janiss 03/23/2009 8:01pm

    I AM a liberal – progressive liberal, in fact, and I also trade and invest in the stock market. (Being on the left and money-wise CAN go hand-in-hand.) I am vehemently against this bill because, as everyone has already pointed out, it will severely damage the small investors’ ability to survive, while the big boys (who created many Wall St. problems in the first place) will find ways to escape getting this penalty. I think this bill was created and is being sponsored by people who are naive and ignorant about the stock market and investors/ traders. I actually called my representative to voice my concern about it (something I do very rarely), and if it gets ANY traction whatsoever, I will write and make sure he is educated on why it is wrong for his constituents.

  • ramanajan 04/18/2009 4:53pm

    I guess if nobody has any retirement left we will simply have to all go on welfare. This bill stinks.

  • PKSully 12/09/2009 7:18am

    I trade Eurodollar options (the 3 mo. LIBOR rate, not the currency) at the CME. The round trip per contract costs would be $5,000 based on the $1 million notional value of the contract. The bid/ask spread is currently $6 wide and in my best year I averaged $1.57 per contract traded. Clearly, the Chicago exchanges would cease to exist (at least in the U.S.) and with that about 25,000 good jobs. Can someone explain to me how we caused this shit storm we’re in? I realize this proposal is probably just political posturing by some wingnuts but why aren’t sane members of Congress calling these fools out?

  • SquawkBox 12/10/2009 10:04am

    With all due respect to those who think this tax is a good idea, it only looks to me like yet another example of rudderless politicians responding to fickle, uninformed public opinion, attempting to fix something they do not understand, and which may not even be broken. The law of unintended consequences will apply.

  • pwattpmg 01/20/2010 10:00am

    This bill only worsens the way the odds are stacked against the retail investor. If you manage your own savings, your transaction costs not only go up because of the tax itself, it will go up because the spreads, the difference between the bid and ask increases due to decreased liquidity. Who does that benefit? The market makers, “Wall Street.” And “Wall Street” will continue to trade away from the market anyways, ie., away from the market price. The exemption for mutual funds won’t help because the transaction costs just get passed on to the retail investor. It won’t matter if the mutual fund is held in a retirement account or not. There is no provision against that happening. Sadly, with this bill anyone on “Main Street” with savings in anything other than some passive instrument, a T-bill, a CD, etc., will pay disproportionately in the end.

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