Intelligence

2016 election theme: Transaction tax

binna

Binna Kim

President

“How does Wall Street feel about the two candidates? It’s safe to say it’s a mixed bag,” wrote Milton Ezrati, Vested’s recently appointed chief economist, in Investopedia last week.

According to Ezrati, one policy issue the financial community has been monitoring is the prospects of a financial transaction tax because it would make high-frequency trading less profitable for financial institutions. The details of a transaction tax vary based on who’s doing the talking, but it generally seeks to levy a tax on the exchange of certain assets — not only stocks and bonds, but also derivatives and other synthetic instruments — to discourage the kind of trading its supporters say is speculative and risky.

This policy idea is not unique to the United States. The European Union first debated a transaction tax in 2011; the following proposal failed. Now, a smaller group of EU member-countries continue to try to push it through, but the subtext of this Bloomberg article seems to suggest passage is again unlikely.

Ezrati pointed out that, although the Democratic Party platform supports a transaction tax, the Clinton campaign has not picked up the position.

Read Ezrati’s full analysis here: Trump vs Clinton’s Tax Plan: What Wall Street Thinks.

(Image via Flickr.)

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