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 infrastruc-
ture and our environment, strengthen our financial secu-
rity, expand opportunity and reduce market volatility. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Tax on Wall Street 
Speculation Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
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(1) The global financial crisis cost Americans 
$19 trillion in lost wealth. 
(2) The global financial crisis was caused by fi-
nancial firms taking great financial risks without 
disclosing those risks to their investors or their regu-
lators, and by regulatory failures to adequately po-
lice the financial services markets for crime, unfair 
or deceptive practices, fraud, lack of transparency, 
and mismanagement. 
(3) Deceptive, illegal, and speculative financial 
practices have harmed public confidence in the integ-
rity and fairness of many United States financial in-
stitutions, and threaten the basic strengths of the 
United States economic system. 
(4) American citizens provided the money to 
stabilize the financial sector, making $700 billion 
available to 800 financial institutions, automakers, 
and insurance companies. 
(5) The global financial crisis, along with the 
wars, unabated and unaddressed climate change, 
unsustainable tax cuts, and a continuing unemploy-
ment crisis, if unaddressed, will deprive a generation 
of a meaningful role in the larger economy. 
(6) Nurses, teachers, public safety officers, and 
other public sector workers have faced drastic fund-
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ing cuts, harming our long-term public safety and 
prospects for economic growth. 
(7) Extreme weather events rooted in climate 
change, including flood, drought, fire, super storms 
like Sandy, as well as ‘‘slow-onset’’ events like sea 
level rise, are wreaking havoc in the United States 
and across the globe resulting in climate change im-
pacts that jeopardize the lives and livelihoods of 
Americans, causing large-scale food and energy inse-
curity in developing countries, and extolling untold 
economic costs. 
(8) According to economists, a small tax on 
transfer of ownership of every financial trade could 
generate hundreds of billions annually in revenue, 
which when invested could help create millions of 
good-paying jobs in both the public and private sec-
tors every year, as well as provide urgently needed 
funding for programs to combat climate change and 
address global health and development issues. 
(9) A transactions tax will help limit high fre-
quency trading which may be as high as 70 percent 
of the market and results in declining market sta-
bility through extreme price volatility, distorted mar-
ket prices, and structural vulnerability to speculation 
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far in excess of the liquidity needs of commercial 
hedgers. 
(10) A securities transfer tax would have a neg-
ligible impact on the average investor. 
(11) The United States had a transfer tax from 
1914 to 1966: The Revenue Act of 1914 (Act of 
Oct. 22, 1914 (ch. 331, 38 Stat. 745)) levied a 0.02 
percent tax on all sales or transfers of stock which 
was doubled in 1932 to help overcome the budgetary 
challenges during the Great Depression. 
(12) Forty nations have or have had some form 
of a financial transactions tax; it is endorsed by 
more than 1,000 economists; and 10 European 
countries are moving forward on implementing a co-
ordinated financial transactions tax after European 
Union finance ministers signaled approval in Janu-
ary 2013. 
(13) Revenue generated by this tax could be 
available to— 
(A) create a more dynamic economy and 
enhance economic opportunity by providing free 
college education and lessening student debt; 
(B) strengthen financial security and ex-
pand opportunity for low- and moderate-income 
families, including strengthening the social safe-
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ty net and expanding resources for child care, 
Social Security, and savings incentives; 
(C) expand resources for State and Fed-
eral investments that protect our health and en-
vironment, investing in water and wastewater 
infrastructure, rebuild our crumbling physical 
infrastructure, and create good paying jobs 
by— 
(i) expanding and improving Medicare 
and Medicaid; 
(ii) investing in job training, public 
sector jobs, and green jobs; 
(iii) providing housing assistance to 
low-income households; 
(iv) investing in transportation includ-
ing public mass transit and an infrastruc-
ture bank that promotes environmentally 
responsible domestic manufacturing and 
construction industries; and 
(v) protecting our environment and 
building a clean energy economy, including 
efforts to combat climate change and build 
resilience to its effects in the United States 
and in developing countries; and 
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(D) fund international sustainable pros-
perity programs such as HIV treatment, re-
search and prevention programs, other inter-
national health and humanitarian assistance, 
and climate change adaptation and mitigation 
efforts by developing countries. 
SEC. 3. TRANSACTION TAX. 
(a) IN GENERAL.—Chapter 36 of the Internal Rev-
enue Code of 1986 is amended by inserting after sub-
chapter B the following new subchapter: 
‘‘Subchapter C—Tax on Trading Transactions 
‘‘Sec. 4475. Tax on trading transactions. 
‘‘SEC. 4475. TAX ON TRADING TRANSACTIONS. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 
a tax on the transfer of ownership in each covered trans-
action with respect to any security. 
‘‘(b) RATE OF TAX.—The tax imposed under sub-
section (a) with respect to any covered transaction shall 
be the applicable percentage of the specified base amount 
with respect to such covered transaction. The applicable 
percentage shall be— 
‘‘(1) 0.5 percent in the case of a security de-
scribed in subparagraph (A) or (B) of subsection 
(e)(1), 
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‘‘(2) 0.10 percent in the case of a security de-
scribed in subparagraph (C) of such subsection, and 
‘‘(3) 0.005 percent in the case of a security de-
scribed in subparagraph (D) of such subsection. 
‘‘(c) SPECIFIED BASE AMOUNT.—For purposes of 
this section, the term ‘specified base amount’ means— 
‘‘(1) except as provided in paragraph (2)— 
‘‘(A) in the case of any security described 
in subparagraph (A), (B), or (C) of subsection 
(e)(1), the fair market value of the security (de-
termined as of the time of the covered trans-
action), and 
‘‘(B) in the case of any security described 
in subparagraph (D) of such subsection, the 
fair market value of the underlying investment 
with respect to such security (determined as of 
the time of the covered transaction), and 
‘‘(2) in the case of any payment described in 
subsection (h), the amount of such payment. 
‘‘(d) COVERED TRANSACTION.—For purposes of this 
section, the term ‘covered transaction’ means— 
‘‘(1) except as provided in paragraph (2), any 
purchase if— 
‘‘(A) such purchase occurs or is cleared on 
a facility located in the United States, or 
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‘‘(B) the purchaser or seller is a United 
States person, and 
‘‘(2) any transaction with respect to a security 
described in subparagraph (D) of subsection (e)(1), 
if— 
‘‘(A) such security is traded or cleared on 
a facility located in the United States, or 
‘‘(B) any party with rights under such se-
curity is a United States person. 
‘‘(e) SECURITY AND OTHER DEFINITIONS.—For pur-
poses of this section— 
‘‘(1) SECURITY.—The term ‘security’ means— 
‘‘(A) any share of stock in a corporation, 
‘‘(B) any partnership or beneficial owner-
ship interest in a partnership or trust, 
‘‘(C) any note, bond, debenture, or other 
evidence of indebtedness, other than a State or 
local bond the interest of which is excluded 
from gross income under section 103(a), and 
‘‘(D) any derivative. 
‘‘(2) 
DERIVATIVE.—The 
term 
‘derivative’ 
means any contract (including any option, forward 
contract, futures contract, short position, swap, or 
similar contract) the value of which, or any payment 
or other transfer with respect to which, is (directly 
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or indirectly) determined by reference to one or 
more of the following: 
‘‘(A) Any share of stock in a corporation. 
‘‘(B) Any partnership or beneficial owner-
ship interest in a partnership or trust. 
‘‘(C) Any evidence of indebtedness. 
‘‘(D) Any real property. 
‘‘(E) Any commodity which is actively 
traded 
(within 
the 
meaning 
of 
section 
1092(c)(4)). 
‘‘(F) Any currency. 
‘‘(G) Any rate, price, amount, index, for-
mula, or algorithm. 
‘‘(H) Any other item as the Secretary may 
prescribe. 
Except as provided in regulations prescribed by the 
Secretary to prevent the avoidance of the purposes 
of this section, such term shall not include any item 
described in subparagraphs (A) through (H). 
‘‘(3) UNDERLYING
INVESTMENT.—The term 
‘underlying investment’ means, with respect to any 
derivative, any item— 
‘‘(A) which is described in any of the sub-
paragraphs (A) through (H) of paragraph (2) 
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(or any item substantially the same as any such 
item), and 
‘‘(B) by reference to which the value of the 
derivative, or any payment or other transfer 
with respect to the derivative, is determined ei-
ther directly or indirectly. 
‘‘(4) TREATMENT OF EXCHANGES.— 
‘‘(A) IN GENERAL.—An exchange shall be 
treated as the sale of the property transferred 
and a purchase of the property received by each 
party to the exchange. 
‘‘(B) CERTAIN DEEMED EXCHANGES.—In 
the case of a distribution treated as an ex-
change for stock under section 302 or 331, the 
corporation making such distribution shall be 
treated as having purchased such stock for pur-
poses of this section. 
‘‘(f) EXCEPTIONS.— 
‘‘(1) EXCEPTION FOR INITIAL ISSUES.—No tax 
shall be imposed under subsection (a) on any cov-
ered transaction with respect to the initial issuance 
of any security described in subparagraph (A), (B), 
or (C) of subsection (e)(1). 
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‘‘(2) EXCEPTION FOR CERTAIN TRADED SHORT- 
TERM INDEBTEDNESS.—A note, bond, debenture, or 
other evidence of indebtedness which— 
‘‘(A) is traded on a trading facility located 
in the United States, and 
‘‘(B) has a fixed maturity of not more 
than 60 days, 
shall not be treated as described in subsection 
(e)(1)(C). 
‘‘(3) EXCEPTION FOR SECURITIES LENDING AR-
RANGEMENTS.—No tax shall be imposed under sub-
section (a) on any covered transaction with respect 
to which gain or loss is not recognized by reason of 
section 1058. 
‘‘(g) BY WHOM PAID.— 
‘‘(1) IN GENERAL.—The tax imposed by this 
section shall be paid by— 
‘‘(A) in the case of a transaction which oc-
curs or is cleared on a facility located in the 
United States, such facility, and 
‘‘(B) in the case of a purchase not de-
scribed in subparagraph (A) which is executed 
by a broker (as defined in section 6045(c)(1)), 
the broker. 
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‘‘(2) SPECIAL
RULES
FOR
DIRECT, 
ETC., 
TRANSACTIONS.—In the case of any transaction to 
which paragraph (1) does not apply, the tax imposed 
by this section shall be paid by— 
‘‘(A) in the case of a transaction described 
in subsection (d)(1)— 
‘‘(i) the purchaser if the purchaser is 
a United States person, and 
‘‘(ii) the seller if the purchaser is not 
a United States person, and 
‘‘(B) in the case of a transaction described 
in subsection (d)(2)— 
‘‘(i) the payor if the payor is a United 
States person, and 
‘‘(ii) the payee if the payor is not a 
United States person. 
‘‘(h) CERTAIN PAYMENTS TREATED AS SEPARATE 
TRANSACTIONS.—Except as otherwise provided by the 
Secretary, any payment with respect to a security de-
scribed in subparagraph (D) of subsection (e)(1) shall be 
treated as a separate transaction for purposes of this sec-
tion, including— 
‘‘(1) any net initial payment, net final or termi-
nating payment, or net periodical payment with re-
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spect to a notional principal contract (or similar fi-
nancial instrument), 
‘‘(2) any payment with respect to any forward 
contract (or similar financial instrument), and 
‘‘(3) any premium paid with respect to any op-
tion (or similar financial instrument). 
‘‘(i) ADMINISTRATION.—The Secretary shall carry 
out this section in consultation with the Securities and Ex-
change Commission and the Commodity Futures Trading 
Commission. 
‘‘(j) GUIDANCE; REGULATIONS.—The Secretary 
shall— 
‘‘(1) provide guidance regarding such informa-
tion reporting concerning covered transactions as the 
Secretary deems appropriate, including reporting by 
the payor of the tax in cases where the payor is not 
the purchaser, and 
‘‘(2) prescribe such regulations as are necessary 
or appropriate to prevent avoidance of the purposes 
of this section, including the use of non-United 
States persons in such transactions. 
‘‘(k) WHISTLEBLOWERS.—See section 7623 for pro-
visions relating to whistleblowers.’’. 
(b) PENALTY FOR FAILURE TO INCLUDE COVERED 
TRANSACTION INFORMATION WITH RETURN.—Part I of 
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subchapter B of chapter 68 of the Internal Revenue Code 
of 1986 is amended by inserting after section 6707A the 
following new section: 
‘‘SEC. 6707B. PENALTY FOR FAILURE TO INCLUDE COV-
ERED TRANSACTION INFORMATION WITH RE-
TURN. 
‘‘(a) IMPOSITION
OF PENALTY.—Any person who 
fails to include on any return or statement any informa-
tion with respect to a covered transaction which is re-
quired pursuant to section 4475(j)(1) to be included with 
such return or statement shall pay a penalty in the 
amount determined under subsection (b). 
‘‘(b) AMOUNT OF PENALTY.—Except as otherwise 
provided in this subsection, the amount of the penalty 
under subsection (a) with respect to any covered trans-
action shall be determined by the Secretary. 
‘‘(c) COVERED TRANSACTION.—For purposes of this 
section, the term ‘covered transaction’ has the meaning 
given such term by section 4475(d). 
‘‘(d) AUTHORITY TO RESCIND PENALTY.— 
‘‘(1) IN GENERAL.—The Commissioner of In-
ternal Revenue may rescind all or any portion of any 
penalty imposed by this section with respect to any 
violation if rescinding the penalty would promote 
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compliance with the requirements of this title and 
effective tax administration. 
‘‘(2) NO
JUDICIAL
APPEAL.—Notwithstanding 
any other provision of law, any determination under 
this subsection may not be reviewed in any judicial 
proceeding. 
‘‘(3) RECORDS.—If a penalty is rescinded under 
paragraph (1), the Commissioner shall place in the 
file in the Office of the Commissioner the opinion of 
the Commissioner with respect to the determination, 
including— 
‘‘(A) a statement of the facts and cir-
cumstances relating to the violation, 
‘‘(B) the reasons for the rescission, and 
‘‘(C) the amount of the penalty rescinded. 
‘‘(e) COORDINATION WITH OTHER PENALTIES.—The 
penalty imposed by this section shall be in addition to any 
other penalty imposed by this title.’’. 
(c) CLERICAL AMENDMENTS.— 
(1) The table of sections for part I of sub-
chapter B of chapter 68 of such Code is amended 
by inserting after item relating to section 6707A the 
following new item: 
‘‘Sec. 6707B. Penalty for failure to include covered transaction information 
with return.’’. 
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determination for how such tax is allocated to such bene-
ficial owners shall be made in a reasonable manner not 
inconsistent with regulations or other guidance prescribed 
by the Secretary. 
‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN
GENERAL.—Subsection (a) shall not 
apply to a taxpayer for the taxable year if the modi-
fied adjusted gross income of the taxpayer for the 
taxable year exceeds $50,000 ($75,000 in the case 
of a joint return and one-half of such amount in the 
case of a married individual filing a separate re-
turn). 
‘‘(2) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of paragraph (1), the term ‘modified 
adjusted gross income’ means adjusted gross in-
come— 
‘‘(A) determined without regard to sections 
86, 893, 911, 931, and 933, and 
‘‘(B) increased by the amount of interest 
received or accrued by the taxpayer during the 
taxable year which is exempt from tax. 
‘‘(3) INFLATION ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning after 2022, each dollar 
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amount referred to in paragraph (1) shall be in-
creased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section (1)(f)(3) of the In-
ternal Revenue Code of 1986 for the cal-
endar year in which the taxable year be-
gins, by substituting ‘2021’ for ‘2016’ in 
subparagraph (A)(ii) thereof. 
‘‘(B) ROUNDING.—If any amount as ad-
justed under subparagraph (A) is not a multiple 
of $50, such amount shall be rounded to the 
nearest multiple of $50. 
‘‘(d) ELIGIBLE INDIVIDUAL.— 
‘‘(1) IN
GENERAL.—The term ‘eligible indi-
vidual’ means, with respect to any taxable year, an 
individual who— 
‘‘(A) has attained the age of 18 as of the 
last day of such taxable year, and 
‘‘(B) is a citizen or lawful permanent resi-
dent (within the meaning of section 7701(b)(6)) 
as of the last day of such taxable year. 
‘‘(2) CERTAIN INDIVIDUALS NOT ELIGIBLE.— 
For purposes of paragraph (1), an individual de-
scribed in any of the following provisions of this title 
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for the preceding taxable year shall not be treated 
as an eligible individual for the taxable year: 
‘‘(A) An individual who is a student (as 
defined in section 152(f)(2)) for the taxable 
year or the immediately preceding taxable year. 
‘‘(B) An individual who is a taxpayer de-
scribed in subsection (c), (d), or (e) of section 
6402 for the immediately preceding taxable 
year.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart A of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 25D the following new item: 
‘‘Sec. 25E. Financial transaction tax payments.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
Æ 
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