India Raises Taxes to Curb Retail Frenzy in Equities Trading – msn/Bloomberg
“The government raised the levy on stocks held for less than 12 months to 20%, the first hike since 2008, and to 12.5% from 10% for those held for more than a year, according to the budget presented in parliament Tuesday. The securities transaction tax on equity options was hiked to 0.1%, and to 0.02% on futures, effective from October.”
Financial Transactions Taxes Around the World – CEPR
It is not widely known that the US already levies a very small stock transaction tax which helps fund the Securities Exchange Commission. Changing the tax rate, therefore, should not present technical challenges. Modest increases should not impact financial markets significantly, particularly if done gradually to gauge impacts and find optimum levels.
The Impact of a Financial Transaction Tax – Tax Foundation
“In 2018, approximately $90 trillion in stocks and $216 trillion in bonds were traded on U.S. exchanges, according to the Securities Industry and Financial Markets Association (SIFMA).[6] The size of the derivatives market is harder to determine. The Tax Policy Center (TPC) estimated that $1.1 quadrillion of derivatives (in notional value) was traded in 2015.[7] The size of the tax base for derivatives is much smaller when market value is instead considered. Using either measure, the total base of an FTT far exceeds U.S. gross domestic product (GDP).
“With this massive tax base, the FTT would be a substantial revenue source despite a low tax rate. For example, an FTT of 0.1 percent on all securities would raise $777 billion in revenue over the 10-year budget window, according to the Joint Committee on Taxation (JCT) and the Congressional Budget Office (CBO). However, revenue estimates vary based on assumptions made about the response of the market to the tax. The further trading volume drops in response to the tax, the less revenue the tax raises.”
The Case for the Financial Transaction Tax in 2021 – Appeal
Congress could use a financial transaction tax to help struggling US workers and their families in many ways. One way we have suggested is to channel $30-$50 billion of annual revenue back into the stock market on behalf of low-income workers now left out the country’s 401(k)/IRA retirement savings and investment system. Here’s how that could be done:
Half of Americans have no retirement savings — here’s how Congress can look out for them
A universal retirement savings/system built around existing institutions could boost financial inclusion without negative consequences for people who already have retirement accounts or for the Social Security program. Expanding the existing 401(k)/IRA system could help all American workers own working capital that could increase their old age income and security. Investment in equities by working people’s retirement accounts could offset dampening affects that might result from higher transaction taxes.