Rep. Ilhan Omar (D-Minnesota) has renewed calls she’s made in the past to place a small tax on Wall Street investors amid concerns that were exposed last week amid the GameStop trading frenzy.
Omar proposed in a tweet last Thursday that a 0.1 percent tax on every trade conducted would act as a means to deter frequent trading on the markets, a practice hedge fund managers frequently engage in daily with little regard.
“A small tax — 0.1% — on each Wall Street trade would reduce high frequency trading, a practice which drains profits from retail investors and benefits only the very rich,” Omar wrote in her tweet.
The Minnesota congresswoman also suggested that the tax be used to ease student debt in the United States. Such a tax, Omar argued, would benefit every person currently saddled with college debt, while also making higher learning more accessible in the years ahead.
“We could use the close to $1 trillion [the tax] would generate to cancel all student debt and make college free,” Omar explained.
A small tax – 0.1% – on each Wall Street trade would reduce high frequency trading, a practice which drains profits from retail investors and benefits only the very rich.
We could use the close to $1 trillion it would generate to cancel all student debt and make college free. https://t.co/z4ZZo4Pdui
— Ilhan Omar (@IlhanMN) January 28, 2021
The plan proposed last week by Omar is similar in scope to a bill she and Sen. Bernie Sanders (I-Vermont) pushed in June 2019. In addition to taxing stock trades, that bill would have also taxed trading on bonds and derivatives, and would have produced about $1.6 trillion in federal tax revenues, the lawmakers said at the time.
With that amount of taxes coming in, all student debt for the 45 million individuals who have student loans could have been paid off within a six-month period, and the bill would have also funded college for any person who wanted to attend.
Sanders also revived calls for the plan after retail investors, coordinating through Reddit, were able to raise the stock price of GameStop shares, thwarting plans by hedge funds to “short” the sale of the then-failing stock for their own profits. Sanders also had little sympathy for billionaire hedge fund manager Leon Cooperman, who complained about possibly having to pay a fair share of his income toward taxes, calling the idea a “bullshit concept.”
“Oh look, another billionaire is mad that he might have to pay more taxes while children in America go hungry and veterans sleep on the street. Cry me a river,” Sanders tweeted last week. “Yes. We will make Wall Street billionaires pay their fair share of taxes and create an economy that works for all of us.”
Many other Democrats in Congress expressed outrage, too, after trading apps like Robinhood forbade the buying or selling of GameStop shares. Disallowing retail investors greatly limited how individuals could interact with the market while allowing hedge funds the opportunity to do what they pleased with the stocks.
“We’re done letting hedge fund billionaires treat the stock market like their personal playground, then taking their ball home as soon as they lose,” Rep. Ro Khanna (D-California) said last week. “We need more regulation and equality in the markets.”