[watchin]

I don't see why ... you pay the same whether you make a hundred small transactions or one large one. I can't see Americans refusing to be consumers anymore because of a national sales tax. Sales taxes on the state level haven't done that.

[SAJ]

Some businesses are very highly transaction-intensive, and operate on VERY small margins. Examples on request, or, see my other posts in this thread.

Any flavour of this tax at a rate in excess of one-tenth his stated ''fair'' tax rate (and probably not even that high) will have the net and immediate effect of causing considerable numbers of people to quit, be fired, and/or simply abandon their current business in favour of something else (and that ''something'' is very likely to be offshore, too).

[TopQuark]

A transaction tax is not the same as the sales tax (the latter essentially taxes only what you consume). A movement of $10,000 from one IRA account into another is not a sale and does not result in consumption. It would entail, however, a tax under the proposed system.

[Murtyo]

my understanding of this kind of tax is that it would affect large financial institutions mostly. Currencies, Stocks, Bonds, Govt. Securities and Commodities are the classes of items that are traded most (in dollar terms). All of these classes of items benifit from being in highly liquid markets. This is where the burden of this tax would fall. Some times these trades make a very small percentage profit on a huge transaction. These trades are ways of balancing supply and demand on a global scale. Another problem is that these trading firms would just move offshore - a US Firm could have its overseas operation conduct all of these trades and repatratiate profits.
there are too many holes in this kind of Tax, the more I write about it the more I see them.