Re: Transaction tax equations... Re: So .. how does a transaction tax stack up?

From: Russell Turpin (
Date: Fri Mar 30 2001 - 10:17:40 PST


Your analysis is wrong, though your conclusion is
right. The transaction tax can't be analyzed in terms
of income flow, because transactions occur
independent of that. Consider two investors who
both put $10,000 into stock. The first buys X
shares of IBM, and sells them at the end of the
year. The second buys X shares of IBM, sells them,
buys Y shares of GE, sells them, buys Z shares of
RATL and sells them. Let's assume they both
break even. The first has one full-cycle transaction,
and pays 2% (as example) on that. The second
has three full-cycle transactions, and pays 6%.

The strongest argument against a transaction tax
in the financial markets is that it would kill day
trading, hurt the derivatives market, and lessen


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