Do they have capital gains taxes? Do people day trade in London? 50 bps tax means 12% of their capital per year goes to the govt. I don't understand how someone can day trade in such conditions.
As Specterx points out, they trade CFDs. Whether that option will be permitted here in the US remains to be seen. (Offhand, I can't think of a reason why they would be permitted for the purposes of evading an FTT.) Of course, if anything, FTT increases volatility, but the volatility argument is a canard, anyway: This is about ideology.
Here's the relevant excerpt from the WashPo article, written by VP Biden's former chief economist: "A financial transactions tax (FTT): An FTT is a small — just a few hundredths of a percent — tax on securities trades. I particularly like this idea because it both raises serious revenue and dampens noise/high-frequency trading that has very little to do with productive capital allocation. Recent Congressional Budget Office analysis finds that a 0.1 percent FTT could raise over $700 billion in revenue over a decade. Opponents make the point that the tax will dampen the velocity of trades. But given the tiny magnitude of the tax, the large decline in transaction costs over recent decades and the outsize role that speculative finance has played in recent economic bubbles and busts, perhaps a little dampening is warranted." I love the strawman "objection" to the FTT, that it "will dampen the velocity of trades."
Last I checked we've had a financial transaction tax in the U.S. since 1934. We call it the Section 31 fee, or colloquially the SEC fee. Best I can tell civilization as we know it hasn't ended, or any of the other drastic alarmist consequences listed here. Certainly it's a legitimate debate as to the appropriate magnitude of any transaction fees. But the train left the station generations ago on if any fee at all would destroy markets, clearly the answer to that is that it per se does not.
Last I checked sec fee is a meager 0.0013% per sale. That tallies to the annual fee of 0.32% if traded daily. It's so small it's usually covered by US brokers, right? Nothing like a transaction tax imposed by the socialist government.
Proponents of FTT appear fond of rhetorical feignts like "end of civilization as we've known it" by way of delegitimizing opposing arguments. It's not the end of anything but daytrading as we've known it. Which is precisely why it is inevitable. Consider, too, the extent to which participants on this thread seem to be fine about it. If you folks are ok with an FTT, why should your average of Congress stand in the way? Will it also have adverse economic effects? Oh, for sure. But I'll leave that argument to others.
I'm not a proponent of an additional FTT, I personally think increasing it is a horrible idea. However I also do my best to be intellectually honest, and being intellectually honest in this debate means pointing out that: 1. We've had a transaction tax for nearly a 100 years. 2. Therefore is hyperbole the claim it will "exterminate US markets" as is claimed in this very thread. If you check out the other thread hundreds of posts long on an FTT, which has apparently been imminent for at least a decade, you'll see page after page of this type of hyperbole. So pointing out the hysterics around this discussion are exactly that is in no way an attempt to "delegitimize opposing arguments". In fact it's the opposite, an attempt to focus those opposing arguments on more valid points.
In the spirit of intellectual honesty, you'll no doubt admit that the Section 31 fee is not remotely what FTT advocates have in mind.