A group of Democratic politicians have proposed a financial transaction tax on trades of stocks, bonds and derivatives. Hillary Clinton, the Democratic presidential nominee, is seeking a narrower tax on high-frequency trading (HFT), the technique of using computers to execute transactions in fractions of a second.
Such taxes have been floated in Congress for years without success. But market participants are paying close attention nonetheless. “It’s very much alive,” says Bill Harts, chief executive of Modern Markets Initiative, a trading industry group.
Bernie Sanders, the Vermont senator and former presidential candidate, and Keith Ellison, a Minnesota representative, have each sponsored bills that would impose a tax of 0.5 per cent on the sale of stocks, 0.1 per cent on bonds and 0.005 per cent on derivatives such as futures. Another, introduced by Rep Peter DeFazio of Oregon, would levy a uniform 0.03 per cent tax on stock, bond and derivative transactions.