Wednesday, December 02, 2009

Taxing Stock Trades

The latest brain freeze out of our government is a tax on stock trades.

A growing chorus of Democratic lawmakers and liberal economists are pushing hard for a tax on stock trades to pay for job creation.

By levying a small fee when stocks, futures, swaps, options and other securities are bought and sold, supporters of the tax believe the government can take in between $120 billion and $240 billion annually. That money could be used to fund additional government stimulus to help put the nearly 16 million unemployed Americans to work.


The big issue I see with this is a decline trading volume. That is up to $240 billion out of people's pockets. It could reduce liquidity in the markets It's a very bad idea.

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