Today, over 60% of all trading on Wall Street exchanges is done by computers – all programmed to compete to get the fastest execution of their trades at the best price. Each trade generates a commission so the most trades make the most money. The latest “innovation” is “high-frequency” or “flash” trading, where the computer programs run so fast that they can trade stocks, bonds or commodities thousands of times per minute. These computers are so fast that they can “see” other orders in line before they are actually traded. This allows bonanza profits from the proprietary trading of Wall Street banks and hedge funds such as D E Shaw, advised by Larry Summers, now US President Obama’s chief economic advisor. We support stronger reforms than those in the US Congress (More Advice for Summiteers on Reforming the Global Casino, Hazel Henderson). Many argue a 1% tax on all financial transactions can slow down and reduce the staggering volumes of trading today while raising valuable revenue. (NSFM opinion: Case for Financial Transaction Tax, 9/27/10)
3 Responses to 1% Transaction Tax
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A financial transactions tax make enormous sense towards incentivizing investing while de-emphasizing speculating. A 1% rate is far far too high and wold bring about much of the negative effects critics of the tax put forth. A tax of less than 1/cent share would raise BILLIONS, while still greatly circumscribing the nano-second penny trading whose liquidity value is questionable, without much of the negative consequences put forth.
Yes, I agree totally.