Tax the churners.

• Author: Hightower, Jim
• Position: Vox Populist

Have you heard about high frequency trading? Get ready to be dazzled! High frequency trading means sweeping, purely speculative financial transactions that have been made possible by huge leaps in technology. Using superfast computers and mathematical algorithms, traders search millions of prices at lightning speed and place bets automatically. Transaction times are measured in milliseconds, as the global network of "trading robots" never sleeps, and its sole function is to allow the wealthiest speculators to skim quick profits.

Guess how much in taxes folks pay on the sales in this game? When I buy a $3 pack of toilet paper here in Austin, Texas, I pay an extra 8.25 percent in sales tax. But if a high roller in the high frequency trade game buys $10 million worth of corporate stock, he or she pays zero tax on the sale.

That's why we need a financial transaction tax. The financial transaction tax is not an idea whose time has come; it's time has just returned. From 1914 to 1966, our country taxed all sales and transfers of stock. Today, forty countries have the financial transaction tax, including the seven with the fastest-growing stock exchanges in the world. Seven members of the European Union voted for the tax (including France and Germany) to help blunt rising poverty, restore services, and put people back to work.

This is no soak-the-rich idea. Rather than asking the Wall Street crowd to join us in paying a 6 to 12 percent sales tax, the major financial transaction tax proposal gaining support in the United States calls for a 0.5 percent assessment on stock transactions. That's 50 cents on a $100 stock buy, versus the $8.25 I would pay for a $100 bicycle.

Even at this miniscule rate, the huge volume of high speed trades means such a tax would net about $300-350 billion a year for our public treasury. Plus, it's a very progressive tax. Half of our country's stock is owned by the 1 percenters, and only a small number of them are in the high-speed game. Ordinary folks who have small stakes in the markets, including those in mutual and pension funds, are called "buy-and-hold" investors--they do trades only every few months or years, not daily or hourly or even by the second, and they'll not be harmed. Rather, it's the computerized churners of frothy speculation who will pony up the bulk of revenue from...