Cut Wall Street Down to Size With a Financial Speculation Tax

by Sarah Anderson

If you want to transform the economy, you have to cut Wall Street down to its proper size. One way to do that is to tax the short-term speculative activities that dominate and distort financial markets.

For ordinary investors, the costs would be negligible, like a tiny insurance fee to protect against crashes caused by speculation. But for the highfliers who are most responsible for the financial crisis, the tax could raise the cost of highly leveraged derivatives trading and stock-flipping enough to discourage the most dangerous behavior.