Will the GameStop frenzy revive calls in Congress for a financial transaction tax? Yahoo Finance’s Jessica Smith explains.

Video Transcript

ZACK GUZMAN: Obviously, the attention has been swirling around what changes might come through on the regulation front, and it's catching the eyes of politicians in DC, who are potentially returning to calls to tax individual trades here in the system. For more on that, I want to bring on Yahoo Finance's Jessica Smith, who's taking a look at that for us today. Jess?

JESSICA SMITH: Yeah, Zack. We saw bipartisan backlash to this situation last week, especially after some brokerages restricted trading. The House and Senate both announced hearings. Democrats called for more regulations, and some progressives are now renewing their call for a financial transaction tax.

We saw Congressman Ro Khanna and Congresswoman Ilhan Omar tweet about this, Omar saying Wall Street has "fought to deregulate finance to pre-2008 levels. And the moment regular folks beat them at their own rigged game, it's 'shut it down.' How about this-- financial transaction tax. Now."

Omar and Senator Bernie Sanders did propose legislation that would tax transactions last year, and Omar told Yahoo Finance that that would help cover the cost of canceling student debt or making college tuition free. She also makes the case that this would reduce high frequency trading.

And there is new legislation. Just a couple of weeks ago, Congressman Peter DeFazio reintroduced his bill that would put a tax of 10 basis points on the sale of stocks, bonds, and derivatives. He says that this should raise $777 billion over the next decade. He told Yahoo Finance at the GameStop situation illustrated that Wall Street is, quote, "completely broken."

He went on to say in a statement that "it is clear that comprehensive reform must be undertaken to repair the damage. Any reform must include my financial transaction tax legislation. The FTT would rein in the worst behaviors of Wall Street and help create a more level playing field for Main Street."

Now, opponents of this tax, like Congressman Patrick McHenry, who we just heard from earlier in this hour, say that this would hurt everyday people who are saving for retirement. Zack and Akiko?

AKIKO FUJITA: OK. Thanks so much for that update, Jess. We will, of course, be following any reports of that hearing as talks move ahead,