The Sec's Gold Mine
August 25, 1998
The Securities and Exchange Commission (SEC) assesses transaction fees on the sale of stocks and imposes other user fees so that taxpayers don't have to fund the agency. This year the fees are expected to total almost four times the agency's actual budget.
- Stock transaction fees are expected to raise $500 million this year, with another $700 million coming in from other SEC assessments -- for a total of $1.2 billion.
- Yet the SEC budget for this year is $315 million.
- Critics say the excess fees are simply a tax on capital transactions, which only discourages investment -- leading to reduced productivity, lower wages, inefficiency and slower economic growth.
- Experts say that investors are often unaware they are even paying the fees -- which are levied regardless of whether stocks are sold at a profit or a loss.
Although Congress passed legislation in 1996 intended to reduce excessive fee collections, the amounts have continued to soar.
Reps. Gerald Solomon (R-N.Y.) and Robert Menendez (D-N.J.) have introduced legislation to cap the amount of stock transaction fees the SEC can collect.
Source: Peter J. Ferrara (Americans for Tax Reform), "Slash the SEC's Tax on Capital," Investor's Business Daily, August 25, 1998.
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