Financial Transaction Tax (FTT)
Definition of 'Financial Transaction Tax (FTT)'
In recent times the term financial transaction tax has been used to refer to the proposed bill "Let Wall Street Pay for the Restoration of Main Street Bill." This is officially contained in the United States House of Representatives bill entitled "H.R. 4191: Let Wall Street Pay for the Restoration of Main Street Act of 2009." It is a proposed piece of legislation that was introduced into the United States House of Representatives on December 3, 2009 to assess a minuscule tax on US financial market ("Wall Street") securities transactions. If passed, the money it generates will be used to rebuild "Main Street".
In 1987, Jim Wright, the Speaker of the House and a Texas Democrat, proposed a fee of 0.25% to 1% on both the buyer and the seller of each securities transaction. He favored the transaction tax because the financial burden would fall on the wealthy who trade in stocks and was quoted in The New York Times as saying, "My philosophy is that taxes should be based on ability to pay."
Between 1914 and 1966, a securities transfer tax did exist in the United States, with different effective rates for equities and debt, as well as for original issuance and subsequent trading. But the tax was repealed in 1965.
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