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Wall Street Tax Act of 2023
12/15/2023, 4:01 PM
Summary of Bill HR 4870
Under the provisions of the Wall Street Tax Act, a small tax would be levied on each transaction, with the rate varying depending on the type of financial instrument being traded. The bill also includes measures to prevent tax evasion and ensure that the tax is collected efficiently.
Supporters of the bill argue that it would help to reduce market volatility and curb excessive risk-taking by financial institutions, while also providing much-needed revenue to fund important social programs. Critics, however, have raised concerns that the tax could harm market liquidity and drive investment away from the US. The Wall Street Tax Act of 2023 is currently being debated in Congress, with proponents and opponents both making their case for or against the legislation. It remains to be seen whether the bill will ultimately be passed into law, but it has sparked a lively debate about the role of financial markets in the US economy and the best way to regulate them.
Congressional Summary of HR 4870
Wall Street Tax Act of 2023
This bill imposes a 0.1% excise tax on certain financial transactions such as the purchase of stocks, bonds, and derivatives.
The tax applies to the purchase of a security if (1) such purchase occurs on, or is subject to the rules of, a qualified board or exchange located in the United States; or (2) the purchaser or seller is a U.S. person.
A security includes
- a share of stock in a corporation;
- a partnership or beneficial ownership interest in a partnership or trust;
- a note, bond, debenture, or other evidence of indebtedness; and
- derivatives that meet specified criteria.
The tax applies to transactions with respect to a derivative if (1) the derivative is traded on, or is subject to the rules of, a qualified board or exchange located in the United States; or (2) any party with rights under the derivative is a U.S. person.
The bill exempts from such tax (1) initial issues of securities; and (2) any note, bond, debenture, or other evidence of indebtedness that is traded on or is subject to the rules of, a qualified board or exchange located in the United States, and has a fixed maturity of not more than 100 days.
The tax applies to transactions by a controlled foreign corporation and must be paid by its U.S. shareholders.
