Democratic presidential candidate Bernie Sanders introduced legislation that would impose a tax on trades of all stocks, bonds and derivatives in the U.S., a move he says would help curb Wall Street speculation and help finance his campaign promise to provide tuition-free college and cut student debt.
Sanders has been promoting a financial transactions tax since his run for the Democratic nomination in 2016. The plan he offered Wednesday would apply a 0.5% tax rate for stock trades, a 0.1% rate for bond trades, and 0.005% for derivatives transactions.
The tax would both provide a disincentive for high-frequency trading based on algorithms and let Wall Street help middle-income Americans who helped foot the bill for the bailout of financial institutions after the 2008 market crash, he said at a news conference with other Democratic co-sponsors.
“While millions of American suffered from the Great Recession, Wall Street received the largest taxpayer bailout in the history of the world, with no strings attached,” Sanders said. He added that leading financial institutions have recovered and are doing “phenomenally well.”
As he did in 2016, Sanders said the tax could generate enough revenue to offset the costs of tuition-free college and help pare down student debt. He said Wednesday that the proposal could generate as much as $2.4 trillion over a decade.
The bill’s lead Democratic House sponsor, Representative Barbara Lee of California, said the “massive revenue” could ensure that “Wall Street pays their fair share.”
Sanders has been unveiling a series of proposals that have little chance of passing in Congress but underscore the progressive ideas he’s highlighting in his fight for the 2020 Democratic presidential nomination in a crowded field.
Last week, he joined Democratic Representative Alexandria Ocasio-Cortez on a measure to enact a federal limit of 15% on credit card interest rates. He’s already proposed an expanded estate tax that would hit individuals worth at least $3.5 million when they die.
Sanders’s new proposal adds to the ways he makes taking on Wall Street and corporations a top theme in the 2020 race. Sanders is highlighting contrasts with former Vice President Joe Biden, the current front-runner, who is offering a more centrist alternative to a largely left-leaning field of nearly two dozen Democratic contenders.
He’s also competing with Senator Elizabeth Warren of Massachusetts, who’s built her reputation as a harsh critic of Wall Street and as a champion for consumers. Warren has proposed creating an annual wealth tax on households valued at $50 million and more.
Sanders said only one of his 2020 Democratic rivals has signed on to the financial transaction tax measure so far: Senator Kirsten Gillibrand of New York.
Among other recent proposals, Sanders reintroduced a “Medicare for All” proposal whose co-sponsors include four of his presidential primary rivals in the Senate: Warren, Gillibrand, Kamala Harris and Cory Booker. He also has proposed a broad overhaul of policies affecting small-town family farmers and the agriculture industry, which would include a moratorium on new agribusiness mergers.