The proposed Inclusive Prosperity Act, introduced by U.S. Rep. Keith Ellison, D-Minn., came the same day the White House told Congress it would have to cut more than $54 billion from domestic programs -- including $11 billion (2 percent) from Medicare -- if lawmakers and the administration don't forestall looming spending cuts required under a deficit-reduction law.
The cuts, part of a sequestration deal worked out last year to end a U.S. debt-ceiling crisis, are to go into effect Jan. 2, slashing an equal amount from defense spending, unless Republicans and Democrats cut the deficit $984 billion by Dec. 31.
The prosperity act, which Ellison's office told United Press International wasn't intended to offset the possible cuts, would raise the projected $350 billion a year by imposing a 0.5 percent tax on stock trades -- amounting to 50 cents on the purchase or sale of $100 in stock -- and lesser fractions down to 0.005 percent on some securities trades, says the bill, HR-6411, available online in draft form at tinyurl.com/StockTradeTax.
The $350 billion would fund Medicare and Medicaid, support education and job training, provide housing assistance to low-income households and promote "environmentally responsible domestic manufacturing and construction industries," among other programs, the bill says.
It would also "help limit reckless short-term speculation that threatens financial stability," the bill says, adding, "A securities transfer tax would have a negligible impact on the average investor."
The proposed tax would be hard to evade because it is collected at the point of transaction.
The United States had a similar tax from 1914 to 1966, as part of the Revenue Act of 1914. The tax amount then started at 0.2 percent and was doubled to 0.4 percent in 1932 during the Great Depression to help overcome the Depression's "budgetary challenges," the bill says.
Forty countries have a financial-transactions tax, a European Parliament report says, "and more than 1,000 economists have endorsed [such a plan]," says Ellison's bill.
Ellison spokeswoman Jennifer Porter Gore told UPI Friday "the prospects don't look good" for the House to take action on the bill this session.
"But the matter is important and the issue needs to be addressed," she told UPI.
"If it doesn't get picked up this session, he could always introduce it next session," she said.
The tax -- based on a levy suggested by late Nobel laureate economist James Tobin in 1972 -- was criticized when Tobin suggested it because it could unwittingly hurt global economic growth by discouraging financial transactions.
But bill supporter Da Vid Raphael -- founder of the Light Party, which claims to represent "a synthesis of the Republican, Democratic, Libertarian and Green parties" -- told UPI the criticism was "a non-starter" because the tax amount is so small.
The Light Party recommended the tax last year as part of its proposal for "comprehensive tax reform."
"It's a windfall amount of money that's sitting out there," Raphael, a holistic physician and director of the San Francisco Medical Research Foundation, told UPI.