UPDATE 2-Wall St tax has "great deal of merit" - Pelosi

UPDATE 2-Wall St tax has "great deal of merit" - Pelosi







WASHINGTON, Dec 3 (Reuters) -uggs outlet A proposed tax on financial transactions "has a great deal of merit" and would help raise much-needed revenue for the U.S. government, House of Representatives Speaker Nancy Pelosi said on Thursday as other backers touted it as a measure to slash Wall Street salaries.

"It is really uggs outlet a source of revenue that has really minimal impact on the transaction but a tremendous impact on helping us meet our needs," Pelosi said at a news conference.

Her comments suggested the proposal may find its way into a House bill aimed at bringing down the double-digit U.S. unemployment rate before the November 2010 congressional elections.

But analysts said it still faces long odds due to uggs outlet opposition from prominent lawmakers and the Obama administration.

Other backers tapped into widespread anger at banks like Goldman Sachs Group (GS.N) that are posting healthy profits after benefiting from a $700 billion federal bailout.

"Maybe next year they won't be able to afford $17 billion or $20 billion in bonuses because they'll have to pay a modest tax on their high-volume trading," said Democratic Representative Peter DeFazio. "Maybe the average salary will drop to four or five hundred thousand (dollars). Heavens."

DeFazio's measure would apply to trades made by uggs outlet U.S. businesses or residents, no matter where they take place.

It would tax futures contracts, swaps and credit default swaps at a rate of 0.02 percent and stock transactions at 0.25 percent. Options would be taxed at the rate of the underlying asset.

The tax would be refunded for mutual funds and savings accounts for retirement, education and healthcare. It would not apply to the first $100,000 of activity.

The G20 group of industrialized countries asked the International Monetary Fund last month to consider a "Tobin tax" or other methods to fund bank bailouts. The concept is named for economist James Tobin, who proposed a similar measure in the 1970s to dampen foreign exchange trading.

But the envisioned $150 billion per year that would be raised by DeFazio's proposal would not go to Wall Street.

The money would be used to reduce the federal deficit and fund new construction projects and other measures aimed at bringing down the unemployment rate -- now at 10.2 percent -- as the United States struggles to emerge from recession uggs outlet.