White House not keen on financial-transaction tax

White House not keen on financial-transaction tax

Dan Pfeiffer, President Obama’s communications director, indicated on Tuesday that the White House is unlikely to support the idea of taxing the sale of stocks and bonds. Such a so-called financial-transaction tax has just been instituted by France and is supported by other members of the European Union.

Advocates of the tax say it could raise billions of dollars and do little harm to trading since it would be so small. Such a tax might also dampen speculation among big investors and encourage investors to hold onto their investments longer.

Critics say the tax would damage Wall Street by driving trading overseas, hurting U.S. financial markets. The president’s top economic aides, such as Treasury Secretary Timothy Geithner, have previously opposed the tax.

While Pfeiffer said a financial transaction tax has been a topic of discussion, “we don’t always agree with the rest of the world.” Pfeiffer made his remarks during a panel discussion on how to improve the U.S. economy shortly before the Democratic convention in Charlotte began.

Even if the White House proposed a tax, Republicans in control of Congress would move to block it.

Source: MarketWatch