Tax Wall Street to Fund America: How A Tiny Tax Can Make a Massive Difference
By Nishita Nekkanti and Sachi Gosal, Congress Watch Advocacy Interns
While working families struggle to afford healthcare, childcare, housing, education, and even basic sustenance like food, the Trump administration and the Congressional majority are pushing a false narrative that government services that support the American people must be cut due to a lack of government revenues. Of course, these same arguments don’t come into play when it comes to huge tax giveaways to billionaires and companies like hedge funds.
President Trump signed the 2025 Republican budget reconciliation into law on July 4, enacting the largest single transfer of wealth in U.S. history. The bill is not only projected to add $4.1 trillion to the national debt by 2034, but also includes massive tax breaks for the ultra-wealthy class paid for by cutting government programs like Medicaid and SNAP that support low-income communities. While the reconciliation bill included provisions like deductions for tips and overtime pay, these were comparatively tiny and also temporary, sweeteners added to make the package more politically palatable to middle-class Americans as they do very little to set working families up for long-term success and stability.
The reconciliation package, which Public Citizen has dubbed the “Big Ugly Law” was a missed opportunity for Congress to actually unrig the tax code, making those with robust resources– like Wall Street and large, profitable companies– pay more of their fair share, which would greatly increase revenues. Those revenues would allow the nation to actually expand support for working-class Americans. One example of one of these revenue raisers that has been overlooked for far too long is the financial transaction tax, or FTT.
Under an FTT, each purchase of a financial asset (i.e. stocks, bonds, and derivatives) is taxed a fraction of a percent. In 2025, The Wall Street Tax Act was introduced in the Senate by Sen. Brian Schatz (D-Hawaii) and in the House by Rep. Val Hoyle (D-Ore.). The legislation would implement an FTT which would deliver hundreds of billions in new revenue that could be reinvested in making life more affordable for ordinary Americans. Under the bill, each sale of a security would be subject to a 0.02% tax with an additional 0.02% added each year until 2029, at which point the tax would be levied at 0.1%. For perspective, a 0.1% tax means that for every $100 traded, 10 cents would be allocated to the government.
All those dimes stack up. Once the bill is fully implemented, it could raise $600 billion over a ten year period. Rep. Hoyle has suggested that the returns could be used to strengthen essential government services such as education funding, affordable housing, and infrastructure development. The phased-in approach taken by the Wall Street Tax Act in the 119th Congress was modeled after a proposal by Antonio Weiss, a senior fellow at the Harvard Kennedy School and former counselor to the U.S. Treasury Secretary, and Laura Kawano, a Research Affiliate at the University of Michigan. With the top income quintile estimated to pay 69% of the total proposed tax change and nearly a quarter of the tax paid by just the top 1%, the economic disparity bred by the financial sector could be reduced. Weiss and Kawano also highlighted that the FTT would be relatively simple to implement, while encouraging long-term investments.
An FTT is a win-win proposal because in addition to creating large amounts of revenue, the tax also discourages risky and speculative high frequency trading (HFT). HFT is a type of asset trading that uses specialized algorithms and computers to make high-volume trades in seconds, producing small profits from each trade to accumulate large returns. This practice exacerbates volatility in the stock market, causing mass selloffs that affect retirement, pensions, and investments of working Americans, all so corporations and traders can put more money back into their pockets.
The implementation of an FTT has already proved to be feasible with the United States levying an FTT from 1914 to 1966 and other countries currently having one in place. A 2025 Global Solidarity Levies Task Force report found that replicating existing FTTs, like those raising $17 billion annually in France and the United Kingdom, could help finance climate action. Expanding existing taxes could generate an additional $87 billion per year, and there is a global push to use the revenue from these taxes to support urgent and underfunded climate change response and mitigation.
Despite these benefits, an FTT like the Wall Street Tax Act has been left out of recent reconciliation packages, including the one passed in 2025 by the Republican majority. Additionally, it was left out of the Democratic-passed Inflation Reduction Act, which did include a number of other progressive revenue raisers.
Now is the time to make sure that our national leaders on both sides of the aisle hear loud and clear that Wall Street needs to shoulder more of the load and that we can and should be raising revenue through a tax on stock, bond and derivative trades to finance important services for working families. If you would like to support this cause, please click here to sign our petition to urge Congress to implement a more equitable tax code, including an FTT. If America is supposed to be about opportunity, we need to prioritize investing back into the American people to help them get ahead rather than lining the pockets of Wall Street tycoons.