At the risk of sounding like I hate nurses, or higher education or puppies, here we go again with the FTT and me yelling about it. You kids get off my lawn, too.
Bernie Sanders is getting behind the Robin Hood tax this time. This time it’s for free college education. Which might be a decent idea for some people, but the purpose behind imposing this tax is irrelevant; the tax is a bad idea in and of itself.
Just some of the reasons it’s a terrible idea:
- 50 cents per $100 is actually a stonking size. What happened to the “tiny tax” of a few years back? Oh yeah, it went up, like taxes always do.
- It will discourage trading and liquidity where ordinary investors need liquidity.
- It will make the stocks of small and emerging companies less attractive.
- The UK tax people keep referring to is a completely different animal.
But the biggest reason people should just give up on this idea is that however great the thing is that you want to spend the money on, however many expert tax and securities experts you get to draft the legislation, there is absolutely no way you can ever prevent Wall Street lawyers finding a way around it and routing trades to a jurisdiction where it doesn’t apply. Which solution, will of course, really only be available to the banks and big institutions that you are trying to nobble here, so this tax will primarily be paid by the little investors.