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financial transaction tax

  #28 (permalink)

New York
Posts: 13 since Jan 2010
Thanks: 6 given, 15 received

The entire industry will, at a minimum, cite the failed Swedish implementation of a transaction tax; bond trading fell 85%, futures trading fell 98%, options market completely died. And this was in the first week after the tax went into effect. It was repealed about 6 years after implementation. The devastation to the industry was widespread. Revenues from the tax were less than 10% of what was forecast.

Expect every exchange, broker, and intermediary in all asset classes to fight tooth and nail. There's just too much to lose. Libs, particularly one from Oregon, have been floating this stupid idea for 10 years never getting any real traction.

My prediction; the more traction this stupid idea gains, the harder the industry will fight back. Targeted exemptions won't be enough to satisfy those exempt because everyone has something to lose should a transaction tax be implemented. The idea should be a non-starter but in the current political climate with its oppossing income inequality-socialism saves theme, the far leftists in the Democratic party think it's an idea whose time has come.

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