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Financial transaction tax tpc7/23/2023 ![]() That’s actually $2 million worth of trades, and at 0.1% that comes to a total tax bill of $2,000 - maybe not a lot to someone moving around a million dollars, but certainly not nothing. Let’s say an investor decides to move $1 out of stocks and into bonds as a way to guard against a potentially volatile market. A financial transaction tax of 0.1% may seem fairly low, but when you start to consider the large number of trades the wealthy make, you can see how much it could cost some investors. On the individual investors who would be subject to the tax, on financial markets as a whole, and on the federal budget, which would see a big influx of revenue.įirst, consider the impact on an individual investor. What Kind of Impact the Financial Transactions Tax Would Have?Ī financial transactions tax would have three major points of potential impact. Though the rate is the same regardless of income, the simple fact is that wealthy people are much more likely to do significant trades on the financial markets. Warren, for example, proposed a financial transactions tax of 0.1%, which comes to $1 per every $1,000 traded.Ī financial transactions tax is generally considered a progressive tax, because rich people will pay a higher percentage of it than less wealthy people. The idea proposed by progressives is for a significantly steeper tax. does have financial transactions tax already, but it is very small, coming out to just about $0.02 per $1,000 traded, a rate of 0.002%. Generally, a financial transactions tax applies to anyone buying or selling a financial contract - including stocks, bonds and derivatives. Put simply, a financial transactions tax is a tax levied on investors when making transactions on the financial market.
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