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Financial-Transactions Tax Would Hurt Retail Investors


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A U.S. financial-transactions tax would decrease liquidity, increase volatility, and hurt retail investors.
Last month Senator Brian Schatz (D., Hawaii) introduced a bill in Congress to pass a financial-transactions tax (FTT) at the federal level. An FTT would effectively act as a 0.1 percent levy per trade on all financial transactions (e.g., stock and bond trades). Further to the right, Oren Cass the founder and executive director of the think tank American Compass has argued that policymakers “should consider . . . imposing a financial-transactions tax on asset exchanges in the secondary market.” In an interview with Bloomberg, Cass suggested that some congressional Republicans had indicated privately that they would be receptive to such a tax. ....

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