Wall Street Transaction Tax Wins Backers on GameStop Furor (1)

Some Democrats in Washington are seizing on the recent frenetic trading in GameStop Corp. to push the financial transaction tax long favored by progressives, setting up a battle with Wall Street firms that bitterly oppose the idea.

After a House hearing Thursday to examine the GameStop issue, Representative Maxine Waters, the California Democrat who chairs the committee, said she is considering such a tax, which came up several times during testimony.

Investment firms and stock exchanges are lining up lobbyists and public-relations firms in hopes of stopping the tax, which could decrease trading activity and lower earnings. They see ...