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Momentum is building for a stock-trading tax — and Wall Street is furious

February 22, 2021. Summarized by summa-bot.

Compression ratio: 20.2%. 1 min read.

Uncle Sam is in search for a pot of gold that could ease the pain of trillion-dollar deficits. And some believe Wall Street might just have the answer.

The White House told CNN Business on Sunday that a financial transaction tax on GameStop-like trading deserves additional study and can be part of a greater evaluation of such a tax for revenue and market stability.

"The odds are still against a financial transaction tax being enacted, but for the first time in a decade this proposal should be considered as a viable policy option rather than just another talking point," said Isaac Boltansky, director of policy research at Compass Point Research & Trading.

A financial transaction tax would be an incredibly efficient and progressive way to raise revenue," Aaron Klein, a former Treasury Department official in the Obama administration, told CNN Business.

Citadel Securities and Virtu Financial (VIRT), two high-speed trading firms that would be hurt by a financial transaction tax, are also members.

James Angel, a Georgetown University professor who specializes in market structure and regulation, authored a Chamber of Commerce-funded paper in 2019 that found a financial transaction tax would hurt Main Street by driving up the cost of trading by more than the amount of the tax.

"We firmly believe a financial transaction tax would injure Americans trying to save for retirement," Griffin said.

Kelleher thinks Congress should focus on taxing orders, not transactions, because a staggering amount of all stock trade orders (some estimates say 99%) are canceled because of high-frequency trading strategies.

"A financial fee on orders could be the death knell for predatory high frequency trading," he said.

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