Stock trading by members of Congress has gained significant public attention. A number of proposals designed to ban individual stock trades by members of Congress have been proposed — and some ideas have received significant pushback.
One of those proposals would require all members of Congress, their spouses and their dependent children to place certain investment assets in a blind trust within 90 days of taking office. The law would also allow a deferral period to pay capital gains taxes if assets must be divested under the new rules.
We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about banning individual stock trades for members of Congress.
Below is a summary of the debate that ensued between the two professors.
Bloink: This is an issue that’s gained widespread attention in recent years — and not in a good way. We need a system that limits the ability of members of Congress to profit from their inside knowledge when they have obtained that knowledge due solely to their role in Congress. This type of insider trading not only reduces public confidence in our government, but also violates U.S. securities laws.
Byrnes: We already have a system in place, under which we require members of Congress to disclose their stock ownership — including spouses’ stock ownership. That includes purchase and sale of individual securities. That type of transparency is sufficient. If the SEC and other government agencies fail to take action based on these disclosures, that’s another problem.