Both Bernie Sanders and Hillary Clinton recently proposed new Wall Street taxes, which reflect their strikingly different philosophies (and, perhaps, their different personalities). Bernie’s proposal is bold—he squeezes Wall Street to fund programs for our country’s future. Hillary’s proposal is targeted—she tackles a specific problem precisely.
Bernie goes big: he introduced legislation that included a “speculation fee” on “Wall Street investment houses and hedge funds” to collect a 0.5 percent tax on stock trades, 0.1 percent on bond trades, and .005 percent on derivative trades. The tax would hit a wide range of financial transactions—and market participants (not just investment houses and hedge funds). And his tax would be big: a stock buyer’s typical commission of $5 to $10 on a $50,000 stock purchase would jump by $250 under Bernie’s proposal.
Bernie expects his new tax to raise $300 billion annually to pay for free college for all.
In contrast, Hillary wants a more targeted financial tax. She would add a small tax on stock order cancelations, presumably along the lines of the French high-frequency tax. Her tax would apply to algorithmic traders, who place and then cancel millions of orders a year. She wants her tax to curtail harmful trading practices—and get “Wall Street to work for Main Street.” Raising revenue is not the goal—the best outcome would be the disappearance of the cancelations and hence no new revenue.