More than a year ago Senator Tom Harkin (D-Iowa) introduced legislation to impose a tax on high-speed trading, and his bill has languished in the Senate ever since. On Thursday he had a chance to breathe some life into the measure in an interview at MarketWatch.com, an interview in which he offered the same platitudes from a year ago. High-frequency trading, he said, generates no benefit to the economy and therefore could be taxed with little negative impact. Such a tax could raise an estimated $350 billion over the next 10 years, he added:
I really don’t see any evidence that these high-speed traders add anything to the economy, but they do also create some aberrations in the market that have led to some disturbances.
On the one hand, my transaction tax doesn't put them out of business but certainly they would have to pay 3 cents on every $100 in transactions they do. That’s really not very burdensome.
But also we need revenue. We have to get out of this deficit hole we’re in and this transaction tax is estimated to raise about $352 billion over ten years. That’s pretty substantial. And I don’t think it will do anything at all to hurt trading, what I call “real trading.”
This is a rehash of statements he made on his website back in November 2009 when he, along with Representative Peter DeFazio (D-Ore.), introduced his bill. He explained then that the tax would be so small as to be essentially unnoticed in the grand scheme of things, that Wall Street could certainly afford it, and it might slow down that silly and useless high-speed trading that he equates with “unnecessary speculation.”
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