* Proposals put 0.25 pct tax on certain transactions
* Some support in House, but backing elusive elsewhere
(Adds detail on proposals)
By Kim Dixon and Andy Sullivan
WASHINGTON, Nov 18 (Reuters) - Proposed taxes on financial
transactions face an uphill battle in the United States with
powerful interests opposed and a lack of support among some key
U.S. lawmakers.
Proposals in the U.S. House of Representatives that would
impose a 0.25 percent tax on over-the-counter derivatives
transactions and stock trades are among ideas being mulled by
top lawmakers.
But support is lackluster among tax-writing legislators and
the idea is likely to hit a roadblock in the Senate, where
consensus is harder to achieve.
"It comes up because it looks like a money machine ... it's
a very tiny tax on a lot of transactions and seems painless,"
said Clint Stretch, managing principal for tax policy at
Deloitte, and former counsel for the joint congressional tax
committee. "If you are a mutual fund manager, in and out of the
market all the time, those little pieces of pennies would
accumulate."
One proposal could raise $150 billion a year.
Lobbyists for securities firms, brokers and banks are all
watching the debate but believe it ultimately will fail.
In addition, U.S. Treasury Secretary Timothy Geithner has
been skeptical of the idea.
"The Obama administration clearly does not support a daily
transaction tax," Anne Mathias, an analyst in Washington at
Concept Capital, told clients in a note. "We cannot completely
dismiss the slight possibility it could be part of a House jobs
bill in the next month or so, but we think even if it cleared
the House it would have virtually no chance in the Senate."
Several Democratic leadership aides said it was premature
to say whether a transaction tax, which is also being pushed by
unions, would be included in the final package, since it is one
of many items under consideration.
PROPOSALS
Representative John Larson, the No. 4 Democrat in the
House, has proposed a 0.25 percent tax on over-the-counter
derivatives transactions, but his measure has drawn no
co-sponsors since it was introduced in July.
Representatives Peter DeFazio and Ed Perlmutter are
floating a bill that would tax stock trades at 0.25 percent,
options at the rate of the underlying asset, and futures
transactions, swaps and credit default swaps at 0.02 percent.
It would exempt the first $100,000 of trades each year.
The $150 billion raised per year would go to reducing the
deficit and job-creating measures like road construction, the
lawmakers said in a letter to colleagues.
They have spoken with House leaders and aim to introduce
the bill in coming weeks, aides said.
TAPPING INTO ANGER
Democrats hope to bring down the unemployment level before
the November 2010 congressional elections, but they also face
rising public concern over record budget deficits.
A transaction tax could allow Democrats to tap into
grassroots anger at Wall Street and show that they are
committed to paying for some of their proposals instead of
further adding to the national debt.
It also could be blocked by powerful New York Democrats
like Charlie Rangel, chairman of the tax-writing House Ways and
Means Committee, who worry that the tax could hurt the job
market in the nation's financial capital.
House Majority Leader Steny Hoyer did not mention the
transaction tax when he was asked about possible elements of a
jobs package on Tuesday.
(Additional reporting by Thomas Ferraro; Editing by Tim Dobbyn
and Steve Orlofsky)
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