A Fair Transaction Tax For U.S. Stock Trading

Mon, 02/27/2012 - 18:11 EDT - Seeking Alpha

By Colin Reed:I don't consider myself an enemy of free markets. Quite the opposite. But if we are honest, really honest, a transaction tax of say .005 (half a penny per transaction), wouldn't really be a bad thing for US equity markets - or the US Treasury.Free market vigilantes will already be reaching for their calculators, plotting how much the real life cost of imposing such a levy would be for retirees in Florida. How much U.S. competitiveness will be potentially weakened, etc.I am not an enemy of high frequency trading (HFT) either, but it is clearly having a large influence on US equity trading. According to The Economist, trading volume on the NYSE increased 17% annually during the 1960's. From then on trading volumes increased exponentially in line with the number of new listings up until 2008. A fairly smooth upward curve. Then in 2007, the SEC introduced Reg Complete Story »

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A Fair Transaction Tax For U.S. Stock Trading

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