Kasz216 said:
That's because the US tax isn't noticeable. The few countries that still have noticeable ones... aren't exactly strongholds of trading.
And as for the local brokerage point... well, that's really all you can do. Afterall that's why despite germanys prodding almost nobody wants to go at it in a smaller group. They know if they do, those who refuse to go with it will reap big economic gains.
There are MUCH better policies for eliminating high frequency trading.
Something as simple as forcing a position to be held for 1 minute would do more to stop high frequency trading then any tax would.
Or allow stocks to be traded in fractions of cents.
Also like I said before, I'm neither for tax raises or cuts. I think both are fairly useless, with one slightly more damaging then the other.
What keeps economies running smooth is consistency.
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How do you define a "stronghold of trading"? I note that Taiwan and Switzerland both have a "noticeable" tax... but I have no metric to determine if you would consider them to be "strongholds of trading".
And as I pointed out, Sweden's system didn't recover until the tax was removed entirely in 1990, despite the fact that, in 1989, they reduced it to lower than the US one. So apparently, it wasn't the "noticeability" of the tax that was the issue.
Another thing to note is that Sweden applied the tax to Swedes, not to the transactions themselves. This encouraged "offshoring" (as Wikipedia puts it, "Avoiding the tax only required using foreign broker services"). Had they instead applied it to transactions within Sweden, it would have worked just like a sales tax, and not have had such an extreme effect.
And you seem to contradict yourself when you reject the US's instance of the tax as "not noticeable", while simultaneously arguing that forcing trading to only be able to occur at one minute intervals would help to address high frequency trading. Applying the tax at 0.003% (the US tax is higher than that), and assuming just one trade per minute for the duration of a year, you would be left with just 0.000014% of the money left over at the end of it (the rest would go to taxes). Even one trade every six minutes results in only keeping just over 20% (just under 80% go to taxes).
Indeed, in order for just half of the money to go to tax, you would only have to trade once every 22.75 minutes. So clearly, such a tax would pretty much work the same way as your assertion, in that regard. As another way to put it, at 0.003% tax, if they were to undertake a trade once every minute for 24 hours, they would lose 4.23% of their money to tax.
So no, the US tax is definitely noticeable.
What keeps economies running smoothly is appropriate regulation. When governments strip the regulation away, you get massive corruption and massive financial crises. After all, the GFC's root cause was the repeal of Glass-Steagall (and other such removals of regulations).
