There is talk about taxing financial transactions as a way to punish those in the finance business and to raise revenue. Without taking sides I discovered today that this idea has been tried before with varying results. I was looking through a baggie of 1930’s stamps that I bought at a yard sale and came across this one:
It turns out that from about 1909 to about 1930 New York State did charge brokers a stock transfer tax. There was also one in the 1960’s and for some of that period the Federal Government also had a transfer tax.
I’m not sure what the rates were in the past but there is no question that if you make something more expensive by taxing it you will have less of it. Financial transactions would move to where they were treated better, maybe Singapore or Belgrade. Is this the result we want? Here is a link to an article that strongly opposes the transaction tax. And another one on the pro side. I’ll have to think about this one some more.