I 

117TH CONGRESS 

1ST SESSION H. R. 2735 

To impose a tax on certain trading transactions to invest in our families 

and communities, improve our infrastructure and our environment, 

strengthen our financial security, expand opportunity and reduce market 

volatility. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 21, 2021 

Ms. LEE of California (for herself, Ms. NORTON, Ms. PINGREE, Mr. GARCI ́A

of Illinois, Mr. COHEN, Ms. CHU, Mr. JONES, Ms. OMAR, Ms. JAYAPAL, 

Mr. GRIJALVA, and Mr. GARAMENDI) introduced the following bill; which 

was referred to the Committee on Ways and Means 

A BILL 

To impose a tax on certain trading transactions to invest 

in our families and communities, improve our infrastructure and our environment, strengthen our financial security, expand opportunity and reduce market volatility. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tax on Wall Street 

5 Speculation Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


pamtmann on DSKBC07HB2PROD with BILLS
2 

•HR 2735 IH

1 (1) The global financial crisis cost Americans 

2 $19 trillion in lost wealth. 

3 (2) The global financial crisis was caused by fi4 nancial firms taking great financial risks without 

5 disclosing those risks to their investors or their regu6 lators, and by regulatory failures to adequately po7 lice the financial services markets for crime, unfair 

8 or deceptive practices, fraud, lack of transparency, 

9 and mismanagement. 

10 (3) Deceptive, illegal, and speculative financial 

11 practices have harmed public confidence in the integ12 rity and fairness of many United States financial in13 stitutions, and threaten the basic strengths of the 

14 United States economic system. 

15 (4) American citizens provided the money to 

16 stabilize the financial sector, making $700 billion 

17 available to 800 financial institutions, automakers, 

18 and insurance companies. 

19 (5) The global financial crisis, along with the 

20 wars, unabated and unaddressed climate change, 

21 unsustainable tax cuts, and a continuing unemploy22 ment crisis, if unaddressed, will deprive a generation 

23 of a meaningful role in the larger economy. 

24 (6) Nurses, teachers, public safety officers, and 

25 other public sector workers have faced drastic fundVerDate Sep 11 2014 22:01 Jun 15, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2735.IH H2735

pamtmann on DSKBC07HB2PROD with BILLS
3 

•HR 2735 IH

1 ing cuts, harming our long-term public safety and 

2 prospects for economic growth. 

3 (7) Extreme weather events rooted in climate 

4 change, including flood, drought, fire, super storms 

5 like Sandy, as well as ‘‘slow-onset’’ events like sea 

6 level rise, are wreaking havoc in the United States 

7 and across the globe resulting in climate change im8 pacts that jeopardize the lives and livelihoods of 

9 Americans, causing large-scale food and energy inse10 curity in developing countries, and extolling untold 

11 economic costs. 

12 (8) According to economists, a small tax on 

13 transfer of ownership of every financial trade could 

14 generate hundreds of billions annually in revenue, 

15 which when invested could help create millions of 

16 good-paying jobs in both the public and private sec17 tors every year, as well as provide urgently needed 

18 funding for programs to combat climate change and 

19 address global health and development issues. 

20 (9) A transactions tax will help limit high fre21 quency trading which may be as high as 70 percent 

22 of the market and results in declining market sta23 bility through extreme price volatility, distorted mar24 ket prices, and structural vulnerability to speculation 


pamtmann on DSKBC07HB2PROD with BILLS
4 

•HR 2735 IH

1 far in excess of the liquidity needs of commercial 

2 hedgers. 

3 (10) A securities transfer tax would have a neg4 ligible impact on the average investor. 

5 (11) The United States had a transfer tax from 

6 1914 to 1966: The Revenue Act of 1914 (Act of 

7 Oct. 22, 1914 (ch. 331, 38 Stat. 745)) levied a 0.02 

8 percent tax on all sales or transfers of stock which 

9 was doubled in 1932 to help overcome the budgetary 

10 challenges during the Great Depression. 

11 (12) Forty nations have or have had some form 

12 of a financial transactions tax; it is endorsed by 

13 more than 1,000 economists; and 10 European 

14 countries are moving forward on implementing a co15 ordinated financial transactions tax after European 

16 Union finance ministers signaled approval in Janu17 ary 2013. 

18 (13) Revenue generated by this tax could be 

19 available to— 

20 (A) create a more dynamic economy and 

21 enhance economic opportunity by providing free 

22 college education and lessening student debt; 

23 (B) strengthen financial security and ex24 pand opportunity for low- and moderate-income 

25 families, including strengthening the social safeVerDate Sep 11 2014 22:01 Jun 15, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2735.IH H2735

pamtmann on DSKBC07HB2PROD with BILLS
5 

•HR 2735 IH

1 ty net and expanding resources for child care, 

2 Social Security, and savings incentives; 

3 (C) expand resources for State and Fed4 eral investments that protect our health and en5 vironment, investing in water and wastewater 

6 infrastructure, rebuild our crumbling physical 

7 infrastructure, and create good paying jobs 

8 by— 

9 (i) expanding and improving Medicare 

10 and Medicaid; 

11 (ii) investing in job training, public 

12 sector jobs, and green jobs; 

13 (iii) providing housing assistance to 

14 low-income households; 

15 (iv) investing in transportation includ16 ing public mass transit and an infrastruc17 ture bank that promotes environmentally 

18 responsible domestic manufacturing and 

19 construction industries; and 

20 (v) protecting our environment and 

21 building a clean energy economy, including 

22 efforts to combat climate change and build 

23 resilience to its effects in the United States 

24 and in developing countries; and 


pamtmann on DSKBC07HB2PROD with BILLS
6 

•HR 2735 IH

1 (D) fund international sustainable pros2 perity programs such as HIV treatment, re3 search and prevention programs, other inter4 national health and humanitarian assistance, 

5 and climate change adaptation and mitigation 

6 efforts by developing countries. 

7 SEC. 3. TRANSACTION TAX. 

8 (a) IN GENERAL.—Chapter 36 of the Internal Rev9 enue Code of 1986 is amended by inserting after sub10 chapter B the following new subchapter: 

11 ‘‘Subchapter C—Tax on Trading Transactions 

‘‘Sec. 4475. Tax on trading transactions. 

12 ‘‘SEC. 4475. TAX ON TRADING TRANSACTIONS. 

13 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 

14 a tax on the transfer of ownership in each covered trans15 action with respect to any security. 

16 ‘‘(b) RATE OF TAX.—The tax imposed under sub17 section (a) with respect to any covered transaction shall 

18 be the applicable percentage of the specified base amount 

19 with respect to such covered transaction. The applicable 

20 percentage shall be— 

21 ‘‘(1) 0.5 percent in the case of a security de22 scribed in subparagraph (A) or (B) of subsection 

23 (e)(1), 


pamtmann on DSKBC07HB2PROD with BILLS
7 

•HR 2735 IH

1 ‘‘(2) 0.10 percent in the case of a security de2 scribed in subparagraph (C) of such subsection, and 

3 ‘‘(3) 0.005 percent in the case of a security de4 scribed in subparagraph (D) of such subsection. 

5 ‘‘(c) SPECIFIED BASE AMOUNT.—For purposes of 

6 this section, the term ‘specified base amount’ means— 

7 ‘‘(1) except as provided in paragraph (2)— 

8 ‘‘(A) in the case of any security described 

9 in subparagraph (A), (B), or (C) of subsection 

10 (e)(1), the fair market value of the security (de11 termined as of the time of the covered trans12 action), and 

13 ‘‘(B) in the case of any security described 

14 in subparagraph (D) of such subsection, the 

15 fair market value of the underlying investment 

16 with respect to such security (determined as of 

17 the time of the covered transaction), and 

18 ‘‘(2) in the case of any payment described in 

19 subsection (h), the amount of such payment. 

20 ‘‘(d) COVERED TRANSACTION.—For purposes of this 

21 section, the term ‘covered transaction’ means— 

22 ‘‘(1) except as provided in paragraph (2), any 

23 purchase if— 

24 ‘‘(A) such purchase occurs or is cleared on 

25 a facility located in the United States, or 


pamtmann on DSKBC07HB2PROD with BILLS
8 

•HR 2735 IH

1 ‘‘(B) the purchaser or seller is a United 

2 States person, and 

3 ‘‘(2) any transaction with respect to a security 

4 described in subparagraph (D) of subsection (e)(1), 

5 if— 

6 ‘‘(A) such security is traded or cleared on 

7 a facility located in the United States, or 

8 ‘‘(B) any party with rights under such se9 curity is a United States person. 

10 ‘‘(e) SECURITY AND OTHER DEFINITIONS.—For pur11 poses of this section— 

12 ‘‘(1) SECURITY.—The term ‘security’ means— 

13 ‘‘(A) any share of stock in a corporation, 

14 ‘‘(B) any partnership or beneficial owner15 ship interest in a partnership or trust, 

16 ‘‘(C) any note, bond, debenture, or other 

17 evidence of indebtedness, other than a State or 

18 local bond the interest of which is excluded 

19 from gross income under section 103(a), and 

20 ‘‘(D) any derivative. 

21 ‘‘(2) DERIVATIVE.—The term ‘derivative’ 

22 means any contract (including any option, forward 

23 contract, futures contract, short position, swap, or 

24 similar contract) the value of which, or any payment 

25 or other transfer with respect to which, is (directly 


pamtmann on DSKBC07HB2PROD with BILLS
9 

•HR 2735 IH

1 or indirectly) determined by reference to one or 

2 more of the following: 

3 ‘‘(A) Any share of stock in a corporation. 

4 ‘‘(B) Any partnership or beneficial owner5 ship interest in a partnership or trust. 

6 ‘‘(C) Any evidence of indebtedness. 

7 ‘‘(D) Any real property. 

8 ‘‘(E) Any commodity which is actively 

9 traded (within the meaning of section 

10 1092(c)(4)). 

11 ‘‘(F) Any currency. 

12 ‘‘(G) Any rate, price, amount, index, for13 mula, or algorithm. 

14 ‘‘(H) Any other item as the Secretary may 

15 prescribe. 

16 Except as provided in regulations prescribed by the 

17 Secretary to prevent the avoidance of the purposes 

18 of this section, such term shall not include any item 

19 described in subparagraphs (A) through (H). 

20 ‘‘(3) UNDERLYING INVESTMENT.—The term 

21 ‘underlying investment’ means, with respect to any 

22 derivative, any item— 

23 ‘‘(A) which is described in any of the sub24 paragraphs (A) through (H) of paragraph (2) 


pamtmann on DSKBC07HB2PROD with BILLS
10 

•HR 2735 IH

1 (or any item substantially the same as any such 

2 item), and 

3 ‘‘(B) by reference to which the value of the 

4 derivative, or any payment or other transfer 

5 with respect to the derivative, is determined ei6 ther directly or indirectly. 

7 ‘‘(4) TREATMENT OF EXCHANGES.— 

8 ‘‘(A) IN GENERAL.—An exchange shall be 

9 treated as the sale of the property transferred 

10 and a purchase of the property received by each 

11 party to the exchange. 

12 ‘‘(B) CERTAIN DEEMED EXCHANGES.—In 

13 the case of a distribution treated as an ex14 change for stock under section 302 or 331, the 

15 corporation making such distribution shall be 

16 treated as having purchased such stock for pur17 poses of this section. 

18 ‘‘(f) EXCEPTIONS.— 

19 ‘‘(1) EXCEPTION FOR INITIAL ISSUES.—No tax 

20 shall be imposed under subsection (a) on any cov21 ered transaction with respect to the initial issuance 

22 of any security described in subparagraph (A), (B), 

23 or (C) of subsection (e)(1). 


pamtmann on DSKBC07HB2PROD with BILLS
11 

•HR 2735 IH

1 ‘‘(2) EXCEPTION FOR CERTAIN TRADED SHORT2 TERM INDEBTEDNESS.—A note, bond, debenture, or 

3 other evidence of indebtedness which— 

4 ‘‘(A) is traded on a trading facility located 

5 in the United States, and 

6 ‘‘(B) has a fixed maturity of not more 

7 than 60 days, 

8 shall not be treated as described in subsection 

9 (e)(1)(C). 

10 ‘‘(3) EXCEPTION FOR SECURITIES LENDING AR11 RANGEMENTS.—No tax shall be imposed under sub12 section (a) on any covered transaction with respect 

13 to which gain or loss is not recognized by reason of 

14 section 1058. 

15 ‘‘(g) BY WHOM PAID.— 

16 ‘‘(1) IN GENERAL.—The tax imposed by this 

17 section shall be paid by— 

18 ‘‘(A) in the case of a transaction which oc19 curs or is cleared on a facility located in the 

20 United States, such facility, and 

21 ‘‘(B) in the case of a purchase not de22 scribed in subparagraph (A) which is executed 

23 by a broker (as defined in section 6045(c)(1)), 

24 the broker. 


pamtmann on DSKBC07HB2PROD with BILLS
12 

•HR 2735 IH

1 ‘‘(2) SPECIAL RULES FOR DIRECT, ETC., 

2 TRANSACTIONS.—In the case of any transaction to 

3 which paragraph (1) does not apply, the tax imposed 

4 by this section shall be paid by— 

5 ‘‘(A) in the case of a transaction described 

6 in subsection (d)(1)— 

7 ‘‘(i) the purchaser if the purchaser is 

8 a United States person, and 

9 ‘‘(ii) the seller if the purchaser is not 

10 a United States person, and 

11 ‘‘(B) in the case of a transaction described 

12 in subsection (d)(2)— 

13 ‘‘(i) the payor if the payor is a United 

14 States person, and 

15 ‘‘(ii) the payee if the payor is not a 

16 United States person. 

17 ‘‘(h) CERTAIN PAYMENTS TREATED AS SEPARATE

18 TRANSACTIONS.—Except as otherwise provided by the 

19 Secretary, any payment with respect to a security de20 scribed in subparagraph (D) of subsection (e)(1) shall be 

21 treated as a separate transaction for purposes of this sec22 tion, including— 

23 ‘‘(1) any net initial payment, net final or termi24 nating payment, or net periodical payment with reVerDate Sep 11 2014 22:01 Jun 15, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2735.IH H2735

pamtmann on DSKBC07HB2PROD with BILLS
13 

•HR 2735 IH

1 spect to a notional principal contract (or similar fi2 nancial instrument), 

3 ‘‘(2) any payment with respect to any forward 

4 contract (or similar financial instrument), and 

5 ‘‘(3) any premium paid with respect to any op6 tion (or similar financial instrument). 

7 ‘‘(i) ADMINISTRATION.—The Secretary shall carry 

8 out this section in consultation with the Securities and Ex9 change Commission and the Commodity Futures Trading 

10 Commission. 

11 ‘‘(j) GUIDANCE; REGULATIONS.—The Secretary 

12 shall— 

13 ‘‘(1) provide guidance regarding such informa14 tion reporting concerning covered transactions as the 

15 Secretary deems appropriate, including reporting by 

16 the payor of the tax in cases where the payor is not 

17 the purchaser, and 

18 ‘‘(2) prescribe such regulations as are necessary 

19 or appropriate to prevent avoidance of the purposes 

20 of this section, including the use of non-United 

21 States persons in such transactions. 

22 ‘‘(k) WHISTLEBLOWERS.—See section 7623 for pro23 visions relating to whistleblowers.’’. 

24 (b) PENALTY FOR FAILURE TO INCLUDE COVERED

25 TRANSACTION INFORMATION WITH RETURN.—Part I of 


pamtmann on DSKBC07HB2PROD with BILLS
14 

•HR 2735 IH

1 subchapter B of chapter 68 of the Internal Revenue Code 

2 of 1986 is amended by inserting after section 6707A the 

3 following new section: 

4 ‘‘SEC. 6707B. PENALTY FOR FAILURE TO INCLUDE COV5 ERED TRANSACTION INFORMATION WITH RE6 TURN. 

7 ‘‘(a) IMPOSITION OF PENALTY.—Any person who 

8 fails to include on any return or statement any informa9 tion with respect to a covered transaction which is re10 quired pursuant to section 4475(j)(1) to be included with 

11 such return or statement shall pay a penalty in the 

12 amount determined under subsection (b). 

13 ‘‘(b) AMOUNT OF PENALTY.—Except as otherwise 

14 provided in this subsection, the amount of the penalty 

15 under subsection (a) with respect to any covered trans16 action shall be determined by the Secretary. 

17 ‘‘(c) COVERED TRANSACTION.—For purposes of this 

18 section, the term ‘covered transaction’ has the meaning 

19 given such term by section 4475(d). 

20 ‘‘(d) AUTHORITY TO RESCIND PENALTY.— 

21 ‘‘(1) IN GENERAL.—The Commissioner of In22 ternal Revenue may rescind all or any portion of any 

23 penalty imposed by this section with respect to any 

24 violation if rescinding the penalty would promote 


pamtmann on DSKBC07HB2PROD with BILLS
15 

•HR 2735 IH

1 compliance with the requirements of this title and 

2 effective tax administration. 

3 ‘‘(2) NO JUDICIAL APPEAL.—Notwithstanding 

4 any other provision of law, any determination under 

5 this subsection may not be reviewed in any judicial 

6 proceeding. 

7 ‘‘(3) RECORDS.—If a penalty is rescinded under 

8 paragraph (1), the Commissioner shall place in the 

9 file in the Office of the Commissioner the opinion of 

10 the Commissioner with respect to the determination, 

11 including— 

12 ‘‘(A) a statement of the facts and cir13 cumstances relating to the violation, 

14 ‘‘(B) the reasons for the rescission, and 

15 ‘‘(C) the amount of the penalty rescinded. 

16 ‘‘(e) COORDINATION WITH OTHER PENALTIES.—The 

17 penalty imposed by this section shall be in addition to any 

18 other penalty imposed by this title.’’. 

19 (c) CLERICAL AMENDMENTS.— 

20 (1) The table of sections for part I of sub21 chapter B of chapter 68 of such Code is amended 

22 by inserting after item relating to section 6707A the 

23 following new item: 

‘‘Sec. 6707B. Penalty for failure to include covered transaction information 

with return.’’. 


pamtmann on DSKBC07HB2PROD with BILLS
16 

•HR 2735 IH

1 (2) The table of subchapters for chapter 36 of 

2 the Internal Revenue Code of 1986 is amended by 

3 inserting after the item relating to subchapter B the 

4 following new item: 

‘‘SUBCHAPTER C. TAX ON TRADING TRANSACTIONS’’. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to transactions after December 31, 

7 2021. 

8 SEC. 4. OFFSETTING CREDIT FOR FINANCIAL TRANS9 ACTION TAX. 

10 (a) IN GENERAL.—Subpart A of part IV of sub11 chapter A of chapter 1 of the Internal Revenue Code of 

12 1986 is amended by inserting after section 25D the fol13 lowing new section: 

14 ‘‘SEC. 25E. FINANCIAL TRANSACTION TAX PAYMENTS. 

15 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli16 gible individual, there shall be allowed as a credit against 

17 the tax imposed by this chapter for the taxable year an 

18 amount equal to the tax paid during the taxable year 

19 under section 4475 with respect to any covered trans20 action in which the taxpayer is a beneficial owner of the 

21 security transferred in such covered transaction. 

22 ‘‘(b) SPECIAL RULE.—If the tax imposed under sec23 tion 4475(a) with respect to any covered transaction is 

24 paid by any person other than 1 or more beneficial owners 

25 of the security transferred in such covered transaction, the 


pamtmann on DSKBC07HB2PROD with BILLS
17 

•HR 2735 IH

1 determination for how such tax is allocated to such bene2 ficial owners shall be made in a reasonable manner not 

3 inconsistent with regulations or other guidance prescribed 

4 by the Secretary. 

5 ‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED

6 GROSS INCOME.— 

7 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

8 apply to a taxpayer for the taxable year if the modi9 fied adjusted gross income of the taxpayer for the 

10 taxable year exceeds $50,000 ($75,000 in the case 

11 of a joint return and one-half of such amount in the 

12 case of a married individual filing a separate re13 turn). 

14 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.— 

15 For purposes of paragraph (1), the term ‘modified 

16 adjusted gross income’ means adjusted gross in17 come— 

18 ‘‘(A) determined without regard to sections 

19 86, 893, 911, 931, and 933, and 

20 ‘‘(B) increased by the amount of interest 

21 received or accrued by the taxpayer during the 

22 taxable year which is exempt from tax. 

23 ‘‘(3) INFLATION ADJUSTMENT.— 

24 ‘‘(A) IN GENERAL.—In the case of any 

25 taxable year beginning after 2022, each dollar 


pamtmann on DSKBC07HB2PROD with BILLS
18 

•HR 2735 IH

1 amount referred to in paragraph (1) shall be in2 creased by an amount equal to— 

3 ‘‘(i) such dollar amount, multiplied by 

4 ‘‘(ii) the cost-of-living adjustment de5 termined under section (1)(f)(3) of the In6 ternal Revenue Code of 1986 for the cal7 endar year in which the taxable year be8 gins, by substituting ‘2021’ for ‘2016’ in 

9 subparagraph (A)(ii) thereof. 

10 ‘‘(B) ROUNDING.—If any amount as ad11 justed under subparagraph (A) is not a multiple 

12 of $50, such amount shall be rounded to the 

13 nearest multiple of $50. 

14 ‘‘(d) ELIGIBLE INDIVIDUAL.— 

15 ‘‘(1) IN GENERAL.—The term ‘eligible indi16 vidual’ means, with respect to any taxable year, an 

17 individual who— 

18 ‘‘(A) has attained the age of 18 as of the 

19 last day of such taxable year, and 

20 ‘‘(B) is a citizen or lawful permanent resi21 dent (within the meaning of section 7701(b)(6)) 

22 as of the last day of such taxable year. 

23 ‘‘(2) CERTAIN INDIVIDUALS NOT ELIGIBLE.— 

24 For purposes of paragraph (1), an individual de25 scribed in any of the following provisions of this title 


pamtmann on DSKBC07HB2PROD with BILLS
19 

•HR 2735 IH

1 for the preceding taxable year shall not be treated 

2 as an eligible individual for the taxable year: 

3 ‘‘(A) An individual who is a student (as 

4 defined in section 152(f)(2)) for the taxable 

5 year or the immediately preceding taxable year. 

6 ‘‘(B) An individual who is a taxpayer de7 scribed in subsection (c), (d), or (e) of section 

8 6402 for the immediately preceding taxable 

9 year.’’. 

10 (b) CLERICAL AMENDMENT.—The table of sections 

11 for subpart A of part IV of subchapter A of chapter 1 

12 of such Code is amended by inserting after the item relat13 ing to section 25D the following new item: 

‘‘Sec. 25E. Financial transaction tax payments.’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to taxable years beginning after 

16 December 31, 2021. 

Æ 


pamtmann on DSKBC07HB2PROD with BILLS