A financial transaction tax (FTT) is a levy on transactions of stocks, bonds and derivatives. While proposed as a means to raise funds or curb behavior, a financial transaction tax amounts to a sales tax on investors, savers and retirees.
SIFMA is strongly opposed to a financial transaction tax, which raises costs to the issuers, pensions and investors who help drive economic growth, negatively impacting those saving for retirement, college or to buy a home by decreasing the amount of their savings. Moreover, major economies that have adopted such taxes have had overwhelmingly negative results, including reduced asset prices, trading moving to other venues, market dislocation and decreased liquidity. Past experience also suggests that it would raise less revenue than supporters often claim.
The U.S. financial markets are the broadest and deepest in the world and this benefits American individuals and businesses in many ways. An FTT would substantially reduce market liquidity and impair the strength of the U.S. capital markets, a move that runs counter to strong, sustainable, and balanced growth, and the financial impact of such a tax is not just on markets.