But, is it as simple as that?
Perhaps this group has been inspired by the European proposal to introduce a Financial Transaction Tax (FTT) (see here). If it is, then they appear to have misplaced the decimal point (the European proposal, insofar as it relates to shares, is 0.1%).
Although my instincts suggest that there would be a lot of downsides to a tax of this nature, I'm certainly no expert. I guess we ought to remember that, here in Australia, only a generation or so ago that we had a 0.3% stamp duty on trades of listed securities (although the finance industry has obviously "moved on" - or at least changed - a lot since then!) But already France has already introduced a FTT at 0.2% (see here).
However, like most simplistic tax proposals, I suspect that things aren't quite as easy as that. Even a tax that seems designed to hit the perceived baddies in the financial sector, such as "high frequency traders and intermediary financial players", would presumably flow through to institutions closer to real the real economy (superannuation funds, asset managers, insurers and corporates) as both direct and indirect costs are largely passed onto end-users.
And so long as there are jurisdictions out there without such a tax (such as, in the case of Europe, Britain), there will obviously be moves to relocate transactions to those jurisdictions. Certainly, the European proposal is that the FTT will apply to transactions undertaken by entities based in Europe even if the transaction occurs elsewhere, but this seems to be giving something of a "free-kick" to overseas competitors (why would a corporate retain a French bank if a British or American bank has a lower cost of doing business?) And there would be obvious employment ramifications in the financial sector and probably elsewhere.
In the meantime, all credit to those who have the courage of their convictions to stand on the street advocating their ideas - even if, in my personal opinion, their energies would be better focused on some of the other issues affecting our world.
|On another day, further up the street|