Greg North has a great one here in his discussion of Why the U.S. Could Use a Financial Transaction Tax. For years I have been frustrated with the sheer volume of computer driven, speculative and high frequency trading in the market today. I and others, believe it causes havoc within the “free” market where in so many ways it creates it’s own successes and failures. All we have to do is take a look at the average time a stock is held by investors (roughly just 22 seconds) to see trading today is far from what the market was created to accomplish; allow average people to make capital investments in business.
“In January, 11 European countries implemented a Financial Transaction Tax (FTT), which places a small tax on stocks, bonds, and other products traded in financial markets. They expect to raise billions of dollars in revenue, and there are signs the idea for a similar tax may be gaining traction in the United States. Senator Tom Harkin and Rep. Peter DeFazio are reviving their Wall Street Trading and Speculators Tax Act, which includes an FTT but died in committee in 2011.”
Read the post. I see this as a great way to reduce the impacts of speculative trade and achieve more stability in the market. Kind of what the Long Term Capital Gains Rates were conceived to do before being watered down. Fantastic idea.