Sens. Tom Harkin (D-Iowa) and Sheldon Whitehouse (D-R.I.), along with Rep. Pete DeFazio (D-Ore.), unveiled a bill that would place a light tax on all financial transactions — three pennies on every $100 traded. The good news is that it’s a tax so small it could be mistaken for a rounding error. It’s so small, Wall Street could easily afford it and the average E-Trade investor would barely notice it. If this were a tax on coffee, it would cost you $1 for every 800 cups you bought at Starbucks. This insignificant tax raises a significant amount of revenue — $352 billion over the next 10 years. The high-frequency traders that now dominate our markets would be hardest-hit by the tax. A top economist recently concluded that their lightning speed, algorithm-driven trading drains profits from traditional investors. And analysts fear that such mass trading strategies could lead to disaster if markets behave unexpectedly. The new tax would discourage these kinds of trades, which would be a good thing. http://www.washingtonpost.com/opini...96d738-8516-11e2-98a3-b3db6b9ac586_story.html
Pete DeFazio proposed a similar tax instead of the banking bailout. I'm not a big fan of Mr. DeFazio's, but this actually makes some sense to me. Go Blazers
I actually like this idea because it gets at the day traders and high speed computer traders. It's no big deal if you're long, but it would hit those who are gaming the system and causing crazy fluctuations.
Why not get spending under control instead of dis-incentivizing the velocity of money, which is exactly what successful economy wants and needs?
Except the last 10 years have not been abnormal in terms of market volatility. At any point in the history, investors have thought their current time had more volatility than ever before. And it just isn't true.
