Sunday, January 31, 2016

Costs of the transaction tax

Thanks to the internet, you can get informed commentary on politicians' tax wishes.
Like transaction taxes, the latest ideas of Democrats.
A transaction tax is a totally sexy idea to someone that is not familiar to markets.  But, once enacted they will become very familiar with it as all kinds of bills go up; from the grocery to the fees banks charge them to handle money.  Basically, anywhere they transact business will be more expensive.
I should have added that public companies use the capital markets to raise capital for operations and expansion.  A transaction tax makes accessing these markets significantly more expensive.  That hurts GDP growth, potentially increases unemployment, and continues to make America less competitive.
It will cost you, no matter what Democrats say.

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