US House Republicans introduce legislation to block financial transaction taxes

On October 27, 2020, Congressman Bill Huizenga (MI-02), Republican leader of the Investor Protection, Entrepreneurship, and Capital Markets Subcommittee and Republican leader of the House Financial Services Committee Patrick McHenry (NC-10), Republican Leader of the House Financial Services Committee, introduced new legislation to protect middle class investors from Democrats’ harmful tax proposals. The Protecting Retirement Savers and Everyday Investors Act would prohibit states from imposing a Financial Transaction Tax (FTT) on certain industry participants, which would be paid by out-of-state investors when the FTT is passed on to them. This includes Main Street investors saving for retirement, their first home, or their child’s education. This legislation is supported by Americans for Tax Reform (ATR), the National Taxpayers Union (NTU), and the American Retirement Association.

“No government, whether it’s federal or state, should be making it harder for Americans to save for the future,” said Congressman Bill Huizenga. “New Jersey is single handedly penalizing middle class families across America in an attempt to solve its own budget shortfall. New Jersey’s misguided financial transaction tax penalizes those saving for retirement, saving for college, and saving for a down payment on a house. Michiganders and Americans across the nation who are investing and saving for their future should not be forced to pay New Jersey’s transaction tax. The Protecting Retirement Savers and Everyday Investors Act stops this tax increase, promotes financial security, and protects middle class families across America.”

“Democrats are ignoring the facts. We know the FTT will hurt retirement savers. We know the FTT has been proven unworkable in countries around the world. And we know that New Jersey Democrats’ state-level FTT proposal will be a new tax on savers across the country. This bill will protect the everyday investors who would ultimately pay this additional tax on their hard-earned savings—including in their 401(k)s, pensions, and college-savings accounts. As Democrats continue to push their false claim that the FTT is only a tax on the wealthiest, Republicans will continue to fight for middle-class Americans saving for their future,” said Congressman Patrick McHenry.

“Congressman McHenry and Huizenga should be applauded for their work fighting against the effort by blue states like New Jersey to impose new financial transaction taxes on American investors. FTTs have failed everywhere they have been tried and will harm American investors, savers, and businesses. Financial transaction taxes send the wrong incentive to market participants and Americans for Tax Reform applauds Republican members of the House Financial Services Committee who are working to halt this progressive effort,” said Grover G. Norquist, President of Americans for Tax Reform.

Read a letter from Americans for Tax Reform in support of the Protecting Retirement Savers and Everyday Investors Act here.

“As radical state legislatures attempt to institute new taxes on trades made via financial exchanges, the introduction of this important legislation could not have come at a better time. Higher taxes on stock trades will only hurt consumers, businesses, taxpayers, the economic recovery, and American competitiveness. NTU is proud to support legislation that prohibits these particularly harmful state level financial transaction taxes. We look forward to working with Congress to ensure its timely passage into law,” said Thomas Aiello, Policy and Government Affairs Manager for the National Taxpayers Union.

“A financial transaction tax is a tax on the retirement savings of hard working Americans. This bill will prevent this Main Street tax which would otherwise be passed on to middle income earners—two-thirds of 401(k) participants make less than $100,000 a year,” said Brian H. Graff, CEO of the American Retirement Association.

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