The Deficit-Reducing Potential of a Financial Speculation Tax by Dean Baker published by CEPR (1/2011).
“While a number of commissions and organizations around Washington have produced plans for reducing the projected deficit in the decades ahead, most have not included a financial speculation tax (FST) in the mix.1 This seems peculiar since an FST has several features that could make it attractive as a revenue source.
First, it would help reduce the economic rents earned by the financial sector. A tax on the turnover of stocks, options, credit default swaps and other financial instruments would make it less profitable to trade these assets. To a large extent current trading patterns reflect rent-seeking behavior with little or no economic benefit…”
