In the U.S. there is no taxation without representation. And the much derided financial transaction tax is getting some legislative support from Illinois legislators.

According to a recent report from the Illinois News Network, lawmakers from the “the Prairie State” are proposing legislation that would require a $1 fee on any financial transaction done in the state with the exception of securities held in a retirement account or a transaction involving a mutual fund.

“Beginning January 1, 2020, a tax is imposed on the privilege of engaging in a financial transaction on any of the following exchanges or boards of trade: the Chicago Stock Exchange; the Chicago Mercantile Exchange; the Chicago Board of Trade; or the Chicago Board Options Exchange,” according to the text of the bill. “The tax is imposed at a rate of $1 for each transaction for which the underlying asset is an agricultural product, a financial instruments contract, or an options contract. The tax shall be paid by the trading facility or, in any other case, by the purchaser involved in the transaction.”

Illinois state Rep. Mary Flowers, D-Chicago, has been a long-time supporter of the state- based tax proposal for years. Flowers has enlisted the help of Matt Harrington, a self-described financial expert, to explain how the financial transactions tax “could help bring prosperity to our economy,” INN reported.

He said the bill would raise billions of dollars a year for the state by reaching not only reach transactions done in Illinois, but also those done by elsewhere by companies that have a footprint in the state.

“We’ve re-written the bill to make sure that even if they have a footprint here and they clear their trades in New Jersey, they will be responsible,” he said to the House Revenue and Finance Committee.

Majority Leader Greg Harris, D-Chicago is a co-sponsor of the legislation.

According to Jim Toes, Chief Executive Officer of the Security Traders Association, this isn’t the first time the equity trading our industry has faced this issue, and while details have yet to unfold, a proposed FTT will most likely espouse the perceived attributes of past versions. Toes said that its low rate and broad based design raises reliable revenue while curbing behavior deemed threatening to our markets perpetuated primarily by propriety trading firms.

“In the end, an FTT is a tax on capital and the savings of individual investors that causes rippling effects detrimental to our nation’s GDP,” Toes said. “While the arguments for opposing FTTs still exist, the conditions and environment under which they will be presented this election cycle are different enough to cause concern.”

Toes explained that a national FTT flaw is that its low rate will not result in a change of behavior by the entity being taxed and thus it should provide a consistent level of revenue.

“The rates proposed often appear benign until you start doing the math and realize they are anything but. The tax rates being discussed are real and estimated revenues are meaningful, real and meaningful enough to cause a change of behavior resulting in harm to our markets and the investors we serve,” he said.

A proposal by Presidential candidate Sen. Kirsten Gillibrand (D-NY), for example, has an FTT of .1 percent on the value of securities traded and a tax revenue estimate of $777 billion over a 10-year period. At first glance $0.10 per every $100 does not appear to be significant until you realize that an investor who purchases just 10 shares of Amazon, a roughly $16,000 transaction, would pay $16 in taxes.

Here’s another way to look at Sen. Gillibrand’s $777 billion tax over 10 years, or $77.7 billion per year. According to the U.S. Energy Information Administration, the U.S. consumed 140 billion gallons of gasoline in 2015. It would take a $0.55 per gallon tax to generate $77 billion. It’s safe to say a tax of that magnitude and transparency would result in a change of behavior.

A respected law firm recently cited that a characteristic of an FTT is that “investors likely would not notice the small charge and it would be immaterial to their investment decisions. In effect, the tax would be collected in a manner that would be invisible to investors.” There is truth in that statement, which again should cause concern for our industry because it increases the likelihood of an FTT being instituted,” Toes remarked.

“So, yes while the arguments for an FTT remain the same, the backdrop or conditions they will be presented under are very different and as such, our industry should be concerned,” Toes said.