30 countries around the world have now implemented some type of financial transaction tax. The US needs to do this too. Widen the bid ask spread increments and add a tiny percentage of tax to each transaction and this will go a long way to reducing reckless speculation and high frequency trading in public markets. All the while, funds raised can be siphoned back to real world needs like health and education. One simple, easy to implement, elegant step toward societal balance and equality. Congress, get to work.
“The American public provided hundreds of billions to bailout Wall Street during the global fiscal crisis yet bore the brunt of the crisis with lost jobs and reduced household wealth,” Ellison said Monday. “This is a phenomenally wealthy nation, yet our tax and regulatory system allowed the financial titans to amass great riches while impoverishing the systems that enable inclusive prosperity.
“A financial transaction tax protects our financial markets from speculation and provides the revenue needed to invest in the education, health and communities of the American people.”
Under Ellison’s Inclusive Prosperity Act, stock trades would face a transaction fee of 0.5 percent, bond trades would be charged 0.1 percent, and derivatives trades would be assessed a fee of 0.005 percent. Ellison said it would be easy to charge these fees because these trades are all computerized.”
He also said it would make high-frequency trading “unprofitable,” but said this would have the positive effect of reducing speculation on commodities.”