To the editor — The stock market used to be a place where average Americans could invest by buying stocks in our great companies. Today, the market is run by “high frequency traders,” or HFTs — people who make their living buying and selling stocks. The volume of stock transactions in the two major U.S. markets is more than 400 billion a year, 70 percent of which are made by HFTs.
When we buy something, be it a book, clothes, car, boat, fur coat, etc., we pay a sales tax usually somewhere from 7 percent to 9 percent. These high frequency traders who buy stocks, bonds, oil futures or derivatives pay zero percent sales tax.
I believe we need to reintroduce a financial transactions tax, or an FTT, on these sales. From 1914 until 1966, our country taxed all sales and transfers of stocks. Today, 40 countries have FTTs, including France, Germany and seven of the fastest growing stock markets in the world.
A 0.5 percent tax would add about $300 billion to $350 billion annually to our treasury. For those of us who buy and hold stocks, the financial hit would be small, but the Wall Street trader who makes his living trading, would now have to join the rest of the world.