Monday, August 22, 2011

Taxing Trades (This is not about tariffs)

I've thought about blogging this for a few weeks now, especially with all the talk about banning high frequency trading. I figure, if you think something is creating negative externalities (like high volumes of high frequency trades) then a small tax should help mitigate it, without as much of a negative impact on efficiency as an outright ban or fixed quantity restrictions.
I would apply similar logic to political contributions, but I'm sure some lawyer would argue that this would be taxing (and therefore restricting) speech.

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