http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.1068.IH:

This bill is the epitome of the destruction of capitalism and the free flow of capital.  These representatives do not have any idea how detrimental such a tax would be to the very foundation of modern financial markets. The 0.25% tax proposed on every securities transaction covered in the Securities Act of 1934 as well as on all futures contracts will destroy the decrease in transactions costs that have been seen since the decimalization of the stock market.  Any argument to the contrary stating that there is a benefit to this is an uninformed opinion, and would be made by only the stupidest of economically ignorant individuals.

I will add the caveat emptor in that this proposal has been attempted several times in the last decade, and has always been denied.

That, however, covers up the fact that these representatives do not have good economic advisors on their side.  Were we to do a cost benefit analysis of this bill, I would bet millions of dollars and up to the equivalent of world GDP for the next thousand years that this will be the worst disaster in the history of modern finance.

If you do not want to see equity values decline by 99% as everyone flocks towards guaranteed securities like treasury bonds, please contact these representatives and request that they remove this ill-conceived proposal.

It’s not on the senate floor, and probably will never make it there, but the fact it even made it to the house is troubling.  Every single American in particular is at risk of losing nearly all of their life savings through this bill.  Transactions costs have to be minimized in order to provide a free flow of financial information through the proper pricing of securities.  The imposition of this tax creates such a wide margin for valuation that it would be severly disruptive to the assesment of value for institutional and financial managers that are actually the main participants moving the market.

We have seen that the free flow of capital is of paramount importance in this day of instantaneous financial digestion.  Prices move quickly in response to new information.  The imposition of this tax means that the best investment would be savings accounts, and destroy the very fabric of all traditional forms of investment.

While I acknowledge we used to have this tax, I will say that this tax was absolutely an impediment to financial progress for decades where only the richest could take advantage of the mispricing caused by this tax.  We do not want to return to these times, and this will destroy much of the progress of financial markets and pricing that we have seen over the last two decades following the lowering of marginal corporate tax rates by former President Ronald Reagan.

If you do not want to see the only source of saving be your bank accounts with a paltry, non-inflation beating rate of return, please contact the representatives responsible for this proposal of financially unenlightened legislators.