November 13, 2015
I mention this because some of the reporting on this topic might have misled some people. For example, the NYT recently told readers:
“All three candidates [Clinton, O’Malley, and Sanders] support a financial transaction tax to limit high-frequency trading.” [emphasis in original]
While Clinton has proposed a tax on high frequency trading, which is almost certainly unworkable, the other two candidates have actually proposed financial transactions taxes. The taxes they have proposed would raise between $600 billion and $2 trillion over the next decade. Virtually all of this money would come out of the pockets of the financial industry, since its primary impact would be to reduce trading volume. For the vast majority of investors, the savings from reduced trading would be equal or greater than the taxes paid on their trades.
The taxes proposed by Sanders and O’Malley would be a huge hit to Wall Street, bringing it back to the size, relative to the economy, that it was at two or three decades ago. Secretary Clinton has explicitly chosen not to go in this direction.
It is important for the public to recognize this difference. While the other two candidates are proposing measures that would be a major hit to the financial industry, Secretary Clinton is not. Voters should recognize this distinction in their positions; the reporting almost seems designed to hide it. [The Wall Street Journal committed a similar sin, although the error was not quite as egregious.]
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