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Buttigieg Joins Financial Transaction Tax Fray

Legislation
Another Democratic presidential candidate has a plan to tax financial transactions—and it could affect your 401(k). 
 
Days after presidential candidate Mike Bloomberg proposed a similar tax, “Mayor Pete” Buttigieg put forward a financial transaction tax (FTT) as part of a series of proposals to rebalance the economy in favor of American families, while holding Wall Street and corporations accountable for “paying their fair share.”  
 
“It’s time that Wall Street be held accountable for taking advantage of Main Street. As president, Pete will impose a 0.1% financial transaction tax on all stock and other securities trades to curb inequality and Wall Street gambling that causes ‘flash crashes,’” according to the announcement by Buttigieg’s campaign. 
 
“Pete will also make big banks pay every year for the extra financial crisis risk they pose: the bigger and more threatening the bank, the more tax they have to pay,” the announcement further states, while noting that these policies will raise $900 billion to pay for tax relief for working and middle class Americans.
 
What is not explained or acknowledged in Buttigieg’s proposal—similar to other presidential candidates’ proposals—is the effect such a proposal would have on participants in 401(k) plans and other retirement plans that invest in the markets. 
 
Several studies, including those by SIFMA, the U.S. Chamber of Commerce, Vanguard and Modern Markets Initiative, discuss how an FTT would be detrimental to retirement savers and harm the economy.  The American Retirement Association has also decried the proposed FTT, arguing that such a tax is “an attack on American workers who are investing for their future in their 401(k).” 

Most of the leading Democratic candidates for president—Sen. Bernie Sanders (I-VT), Mike Bloomberg, Joe Biden, Sen. Elizabeth Warren (D-MA) and now Buttigieg—have proposed an FTT, leaving Sen. Amy Klobuchar (D-MN) as the only remaining major candidate who has not done so.