Congressional Democrats have introduced legislation to create a new tax on financial transactions that they say, “would generate billions in revenue, while addressing economic inequality and reducing high risk and volatility in the market.”

The Wall Street Tax Act would tax the sale of stocks, bonds, and derivatives at 0.1 percent (10 basis points) and would raise an estimated $777 billion over a decade. A stock trade of $1,000 would incur a tax of $1. The tax would apply to the fair market value of equities and bonds, and the payment flows under derivatives contracts. Initial public offerings and short-term debt (with a maturity of less than 100 days) would be exempted.

statement accompanying the bill says it “addresses the disconnect between the financial system and the real economy by reducing unproductive and speculative trading.”

The wealthiest 10 percent of Americans own an estimated 85 percent of stock market wealth. The bipartisan Tax Policy Center estimates that a tax of this kind would only apply to the highest earners in the country, with almost half of those affected belonging to the wealthiest 1 percent.

“By increasing transaction costs slightly, the bill will help redirect investment that has flooded into transactions without economic value into more productive areas of the economy. It will also reduce the risk of financial crashes and limit the risks that high-speed arbitrage pose to our financial system,” it adds.

The legislation was introduced by U.S. Senator Brian Schatz (D-Hawaii), U.S. Representative Peter DeFazio (D-Ore.), and U.S. Senator Chris Van Hollen (D-Md.).

The legislation is also cosponsored by U.S. Senators Jeff Merkley (D-Ore.) and Kirsten Gillibrand (D-N.Y.) in the Senate. In the House of Representatives, the bill is cosponsored by U.S. Representatives Rosa DeLauro (D-Conn.), Raul Grijalva (D-Ariz.), Pramila Jayapal (D-Wash.), Ro Khanna (D-Calif.), Grace Napolitano (D-Calif.), Alexandria Ocasio-Cortez (D-N.Y.), Chellie Pingree (D-Maine), Mark Pocan (D-Wis.), Jan Schakowsky (D-Ill.), and Peter Welch (D-Vt.).

“Risky financial behaviors like near-instantaneous high-volume trades have destabilized our financial markets while contributing nothing to the economy,” DeFazio said. “Congress needs to rein in excessive speculative activity and protect working families from these dangerous practices while maintaining appropriate market liquidity. This legislation will curb unnecessary speculation and generate much-needed revenue to help the federal government fund national priorities and invest in the real economy to benefit all Americans.”

The Wall Street Tax Act is supported by a number of organizations, including Americans for Financial Reform, Americans for Tax Fairness, United Automobile, Aerospace, and Agricultural Implement Workers of America, UAW, Main Street Alliance, Oxfam, and Public Citizen.