Tax Policy
Tax policy profoundly influences saving, investment, and economic growth. Well-designed tax rules can strengthen U.S. competitiveness, expand opportunities for investors, and foster long-term financial security.
SIFMA advocates for a balanced tax system that raises revenue efficiently while promoting capital formation, economic expansion, and retirement savings. We encourage policymakers to consider how changes to the tax code affect growth, investment, and the competitiveness of U.S. financial markets globally.
Key Focus Areas
Implementing the One Big Beautiful Bill Act
In July 2025, Congress passed H.R. 1, the One Big Beautiful Bill Act, permanently extending several provisions from the 2017 Tax Cuts and Jobs Act and averting major tax increases that could have slowed growth. Key outcomes for capital markets include:
- Section 899: Excluded from the final bill, avoiding steep withholding rates (up to 50%) on income earned by foreign investors and maintaining cross-border investment stability.
- Remittances: Excise tax on transfers to foreign accounts reduced from 3.5% to 1%, with exemptions for Bank Secrecy Act–regulated entities.
- Executive Compensation (IRC 162(m)): Definition of “covered employees” unchanged, preserving current deductibility rules.
- Municipal Bond Tax Exemption: Federal tax exemption for municipal bond interest preserved.
- Stock Buyback Excise Tax: Remains at 1%, with no increase.
- Clean Energy and IRA Credits: Existing projects grandfathered under prior law, and proposed new excise taxes removed.
- GILTI Reform: Modifications to interest expense allocation reduce U.S. tax burdens on foreign income, improving global competitiveness.
- Trump Accounts: Expanded to allow investment in non–U.S.-only products.
- Pass-Through Entity Tax (PTET): Federal PTET proposal excluded; existing state-level treatment preserved.
- Housing-Related Tax Credits: Permanent enhancements to LIHTC, Opportunity Zones, and New Markets Tax Credits to spur affordable housing and community investment.
With the legislative phase complete, SIFMA is now focused on implementation and regulatory guidance, engaging with Treasury and federal agencies to ensure rules are applied effectively and consistently across the capital markets.
Protecting Investors and Retirement Savings
SIFMA remains focused on policies affecting capital gains, dividends, and savings vehicles. Dividend income is already taxed twice – first at the corporate level, and again through individual income taxes – making the U.S. system one of the world’s most burdensome.
More than two-thirds of taxpayers reporting dividend income earn under $100,000 annually, and nearly two-thirds are age 50 or older. Higher dividend tax rates would disproportionately harm these investors, reduce equity valuations, and discourage investment in dividend-paying companies that provide stable jobs and long-term value.
Promoting a Competitive Global Tax System
- SIFMA supports tax rules that enable U.S. multinational firms to compete globally on a level playing field. Policymakers should:
- Minimize double taxation of foreign income and branches;
- Provide clarity and certainty for inbound and domestic participants;
- Allow broad-based deductions for ordinary business expenses; and
- Avoid targeted revenue measures that distort economic decision-making.
A competitive, coordinated tax framework enhances both U.S. business investment and global financial stability.
Opposing a Financial Transaction Tax (FTT)
A financial transaction tax functions as a sales tax on investors, raising trading costs and reducing returns for savers. FTTs penalize participation in markets that already contribute significant tax revenue and would disproportionately impact retirement accounts, mutual funds, and middle-income investors.
Research shows that a 10-basis point FTT on purchases could cost a long-term investor saving $10,000 annually over 40 years roughly $36,000 in lost returns. That is a loss equivalent to more than three years of savings.
SIFMA strongly opposes FTTs, which have consistently reduced liquidity and raised costs in markets where they have been implemented.
The Bottom Line
A stable and competitive tax environment is essential to economic growth and investor confidence. SIFMA supports policies that encourage savings and investment, preserve global competitiveness, and ensure that U.S. capital markets remain the deepest, most liquid, and most dynamic in the world.
