Financial transaction taxes (FTTs) are misguided policy proposals that would only punish underlying beneficiaries. An FTT would harm pensions and put thousands of retired firefighters, teachers, public safety officers, and other public servants in financial jeopardy. In an op-ed for the National Review, Jon Hartley outlines the harmful effects of an FTT. Key excerpts can be found below.
“If so, that’s disappointing. Considering the FTT purely as a revenue-raising mechanism (although, to be fair, many of its advocates see it as a punitive measure to limit what they see as “unproductive” economic behavior), it is likely to raise less money than hoped. Instead, FTTs often encourage exchanges to move and institutions to reroute their trades, while middle-class retail investors end up facing a large degree of the tax incidence in the form of higher transaction costs.”
“Over time, many countries have given up on FTTs much as they have given up on wealth taxes for, primarily, pragmatic reasons in that these taxes have incentivized capital and trading activity to move elsewhere, reducing the prospects for revenue generation.”