GameStop’s situation highlights serious investor protection and market integrity issues, a White House spokesman told CNN Business on Sunday. The possible impact of a tax on financial transactions in trade similar to GameStop deserves further study and may be part of a larger assessment of that tax to gain market stability and revenue, the spokesman said.
Some Democrats have supported a securities trading tax as a way to raise much-needed revenue and address concerns about the health of financial markets. On Thursday, House Financial Services President Maxine Waters said she was “very interested” and that she “certainly looks” at a tax on financial transactions.
A 0.1% tax on stock, bond and derivative transactions could raise $ 777 billion for the federal government over a decade, according to a 2018 estimate from the nonpartisan Congressional Budget Office.
However, this tax will face fierce Wall Street opposition and it is unclear whether moderate Democrats will support it. Opponents warn that it would shoot back at retail investors by raising costs and making financial markets less liquid.
“This approach has a long history of unintended consequences that will penalize American workers, pensioners, and families,” a Coalition spokesman told CNN Business to avoid taxing retirement savings.
This coalition includes the New York Stock Exchange, the Nasdaq and UBS. They are also members of Citadel Securities and Virtu Financial, two high-speed trading companies that would be harmed by a financial transaction tax.
“A FTT will increase business costs for investors, including individuals, undermine the competitiveness of our capital markets and harm the U.S. economy just as we work to recover from this pandemic,” the spokesman said.
“We don’t put light on the American people. You’ll be fine with the tax,” he said. “Our people are fed up with rescuing you all when you do.”