Wall Street transaction tax proposed by Democrats By Ryan J. Donmoyer Bloomberg News Updated: 12/03/2009 08:16:15 PM EST A group of congressional Democrats proposed taxing large transactions in stocks and derivatives, an idea that has received a cool reception from the Obama administration. Iowa Sen. Tom Harkin, Oregon Rep. Peter DeFazio and five other House Democrats proposed the measure, designed to raise $150 billion a year to fund a new jobs bill and help close the federal budget deficit. "Let me be blunt: We need new revenue," Harkin said. He called a tax the "most painless way" to raise revenue and stop risky market speculation. House Speaker Nancy Pelosi said there's a "great deal of merit" in imposing a tax on large stock transactions as long as other major nations do it as well. Treasury Secretary Timothy Geithner said during a Nov. 7 meeting of Group of 20 finance ministers that a "day-by-day" tax on speculation is "not something we're prepared to support." Harkin said he will introduce the bill in the Senate next week with Sen. Bernard Sanders, a Vermont independent who caucuses with Democrats. The measure would be based on legislation DeFazio proposed in the House that would apply a tax of 0.25 percent or 25 basis points to stock transactions in excess of $100,000, and a levy of 0.02 percent or 2 basis points on derivatives including futures, options, swaps and credit default swaps. Harkin and DeFazio said the proposed levy is backed by more than 200 economists, the AFL-CIO and business leaders including Warren Buffett and Advertisement Vanguard Group Inc. founder John C. Bogle. Business groups including the Business Roundtable and the Securities Industry and Financial Markets Association oppose the bill. "Nearly every American would be impacted by a new transaction tax, no matter how small it is," said Steve Bartlett, president and chief executive officer of the Business Roundtable. Kenneth Bentsen, executive vice president for the securities industry group, called the bill "the wrong policy at the wrong time." He said it would make capital more expensive, hurt U.S. companies' ability to compete globally and increase compliance burdens. Christopher Bergin, president and publisher of Tax Analysts, a publisher of tax information, predicted the lobby groups would successfully fend off the proposal.