Sigh. The problem is, so many people see "transaction" and they think that means "retail sales transaction". So this proposal becomes "instant tiny sales tax - what could be wrong with that?"
It's hard to explain that "transaction" also means, say, "Swiss Re transfers $41 million to a bank account in Dallas for 24 hours" or something like that. And it's even harder to explain that it's now more important to the American economy that this kind of transaction take place smoothly, than that anybody in America makes tires or steel or textiles.
This scheme is just a variant on what used to be called the ''Tobin tax'', dreamt up by another ivory-tower academic. I believe he was awarded the Nobel prize, not sure -- if so, there is much to commend the policy of straight-out ignoring any ''economist'' who wins that prize.
A couple of fellow traders and I kicked this idea around about 5 years ago. The only rational action we could figure out, in the event of the institution of such a tax, was to leave the country. Between the number of newly-minted cash/barter transactors, as per this thread, and those who will vacate, I wonder how far off the mark this per-fesser will be on his revenue estimates.
This topic illustrates perfectly the difference between the staticists and the dynamists; how in the world the staticists still believe that people will NOT change their behaviour in response to changes in the tax regime is utterly beyond me.