WASHINGTON — The Senate Finance Committee released a paper Thursday that contains tax reform options for non-income tax issues and related reforms, including a securities transaction excise tax on bonds and other debt.
The discussion paper suggested introducing a tax on financial instruments at a rate of 0.03% of their fair market value where the security is either cleared through a U.S. exchange or where any party to the security is a U.S. person.
A similar proposal, the Wall Street Trading and Speculators Tax Act, S.1787, was introduced in 2011 by Sen. Tom Harkin, D-Iowa., and was estimated to raise $352 billion over nine years.
There have been a number of excise tax options considered in previous tax reform papers. One such example was the Infrastructure, Energy, and Natural Resources options paper which contained a proposal to reform excise taxes used to fund infrastructure-related trust funds and establish a tax on carbon emissions.
The 21-page paper, the last in a series of 10, was published the same time the full committee concluded its meetings on tax reform discussions.
The paper said that non-income taxes, mostly Social Security and Medicare taxes, raise almost as much revenue as individual and corporate income taxes. As with previous draft discussion papers, Committee Chairman Sen. Max Baucus, D-Mont., and ranking minority member Sen. Orrin Hatch, R-Utah., stressed that the tax reform options are not necessarily endorsed by either member.
During a Senate floor statement Thursday, Baucus said “overwhelmingly, people are calling for a simplified tax code.”
“Momentum is building,” said Baucus, who will retire in 2014. “Now is the time for tax reform. Working together, Congress can improve the tax code and update it for the 21st century.”
Last month Baucus and House Ways and Means Chairman Rep. Dave Camp, R-Mich., launched a campaign seeking the public’s input for a simpler tax code and have already received more than 10,000 submissions.