Conservative think tank comes out in support of taxing stock trade

The founder and executive director of conservative think tank American Compass on Thursday announced his support for taxing stock trade, a position traditionally associated with progressives seeking to break up the influence of Wall Street investment banks. 

Oren Cass, a former Bain & Co. management consultant who also worked on Republican Sen. Mitt Romney’s (Utah) 2008 and 2012 presidential campaigns, proposed in a blog post on American Compass’s website that policymakers should consider various actions on the financial sector, including a “financial transactions tax on asset exchanges in the secondary market,” and raising “tax rates on short-term capital gains and the proceeds from speculation.” 

Cass said in an interview with Bloomberg published Thursday that some congressional Republicans have also indicated privately their support for transaction taxes and breaking up big banks. 

Cass said taxes on stock trades are needed to compensate for the economic losses from decades of over-speculation and the lack of sustainable investment. 

“Investment means actually building something for the future that enhances our prosperity, but most of what we call investment isn’t that at all,” he said, adding that he wants to lay “the groundwork for what a kind of post-Trump conservatism should look like.”

The conservative economist said that with the upcoming retirements of a handful of Republican senators, including Pat Toomey (Pa.), Roy Blunt (Mo.) and Richard Burr (N.C.), there will be an opportunity for younger GOP members to enter the arena and the possibility of a “multi-ethnic, working class conservatism.”

The support comes following a series of bipartisan concerns regarding the rapid surge in the stocks of GameStop and other traditionally-shorted stocks as a result of a buying frenzy among amateur traders. 

Members of both parties criticized stock trading app Robinhood after it temporarily restricted trading of stocks popularized by users on a Reddit forum, claiming that the move favored traditional investors and hedge funds. 

A class-action suit has since been filed against the stock trading app, arguing that “purposefully, willfully, and knowingly removing the stock ‘GME’ [GameStop] from its trading platform in the midst of an unprecedented stock rise thereby deprived retail investors of the ability to invest in the open-market and manipulating the open-market.” 

Immediately after GameStop’s rapid surge, progressive lawmakers such as Rep. Ilhan Omar (D-Minn.) called for a small tax on stock trades to “reduce high frequency trading, a practice which drains profits from retail investors and benefits only the very rich,” she tweeted in late January. 

Omar previously teamed up with Sen. Bernie Sanders (I-Vt.) on a proposal to eliminate student debt with a financial transaction tax.

Tags American Compass Bernie Sanders Bloomberg Financial transaction tax gamestop Hedge funds Ilhan Omar Mitt Romney Oren Cass Pat Toomey Richard Burr Robinhood Roy Blunt Stock market stock trades

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