Sen. Pat Roberts (R-Kan.) recently introduced legislation that would stop foreign countries from taxing Americans who profit from U.S. securities transactions.
By blocking foreign governments from collecting taxes on such transactions, Roberts said his proposed bill would protect Americans from additional costs to investors and businesses and avoid problems the taxes would cause to markets.
“In Europe, we have seen the instability these financial transaction taxes have on markets,” Roberts said. “A foreign tax is the last thing the U.S. economy needs. We have too many of our own taxes to have to then collect them for the French.”
Language in the legislation would prohibit the Secretary of the Treasury from assisting any foreign government with respect to the collection of a tax on securities transactions occurring on a United States exchange. It would also protect securities transactions in the United States from enforcement of any excise taxes imposed by the government of France.
Countries that have imposed a financial transaction tax have found that such a tax impedes the efficiency of markets, impairs depth and liquidity, raises costs to issuers, investors and pensioners and distort capital flows by discriminating against asset classes..
“This tax could be especially harmful to farmers and ranchers,” Roberts said. “It is not uncommon for a Kansas farm co-op to use a derivative transaction that is based on a foreign financial instrument; they may hedge grain prices based on European or South American grain prices.”
Roberts said Rep. Tom Price (R-Ga.) plans to introduce companion legislation in the House.