Wall Street Tax Act of 2025
HB4035, titled the Wall Street Tax Act of 2025, would create a new federal excise tax on certain trading transactions under the Internal Revenue Code. The bill imposes a tax on covered purchases of securities and on transactions involving derivatives, with the tax rate starting at 0.02 percent for transactions after December 31, 2025 and increasing annually to 0.1 percent for transactions after December 31, 2029. The tax base is generally the fair market value of the security or, for derivatives, the amount of the payment involved.
The bill defines covered transactions broadly to include many trades executed on U.S. exchanges or involving U.S. persons, and it includes a wide range of securities such as stocks, partnership interests, debt instruments, and derivatives. It also contains detailed rules for who must pay the tax, including exchanges, brokers, direct counterparties, and, in some cases, U.S. shareholders of controlled foreign corporations. The bill directs the Treasury Secretary to issue guidance and regulations to administer the tax and prevent avoidance, including use of non-U.S. persons to evade the tax. It also amends information-reporting rules for controlled foreign corporations and applies the new tax regime to transactions after December 31, 2025.
If enacted, the bill would add a new subchapter to Chapter 36 of the Internal Revenue Code establishing a federal financial transaction tax on securities and derivatives trading. It would affect exchanges, brokers, traders, investors, and entities using derivatives, while excluding certain initial issuances, some short-term traded debt, and several categories of contracts such as certain insurance products, employee options, and some physically settled real-property and business-use commodity contracts. The bill would also expand reporting obligations for controlled foreign corporations and require Treasury to coordinate administration with the SEC and CFTC.
Based on the available context, the bill appears to have been introduced by a group of Democratic members and referred to the House Committee on Ways and Means without recorded committee debate or votes. The sponsor list and title suggest support from lawmakers favoring a financial transaction tax, but there is no recorded vote history or transcript evidence showing broader legislative sentiment. As a result, the only clear sentiment available is that the bill was formally introduced and referred, with no documented opposition or endorsement in the provided materials.
The main points of contention likely involve the policy choice to tax financial trading at all, the breadth of transactions covered, and the potential effects on market liquidity, trading costs, and capital formation. The bill’s inclusion of derivatives, foreign-related transactions, and controlled foreign corporations suggests concern about avoidance and offshore structuring, while the detailed exemptions indicate an attempt to limit impacts on ordinary financing, insurance, and certain business-use contracts. Because no committee transcript or votes are provided, specific objections or supporters cannot be identified from the record here.