Clearly these people don't know anything about economics. This would DESTROY the financial sector. For instances, many short-term financing (think, cash management for things like payrolls etc.) are yielding less than 1%. Since these short-term bonds are by definition bought and paid off as often as monthly, you would pay 24% in taxes on an annualized basis (2% per month because two transactions: Purchase of bonds plus bond face value payout at end of month). Short-term financing rates would skyrocket to 30% or more, causing a huge increase in borrowing costs and therefore less investment and less jobs and less income growth. Not to mention huge increases in layoffs and defaults as large companies can no longer get short-term financing to adjust for discrepancies between cash inflows and payroll dates or debt payment dates or payments to suppliers etc. The short-term money markets exist largely to help large corporations balance the mismatch in timing of cash inflows and outflows.
Of course, they also call for the forced forgiveness of any and all debts. This is insane: The debts owed to banks in either loans or bonds or mortgages back-up our deposited checking accounts. If all debts were wiped clean, banks' assets would be zero, and our bank accounts would empty. Even the FDIC wouldn't have enough money to prop up every bank in the US. It would be the Great Depression magnified 100 times. Not too mention that every bond fund in people's 401(k)'s and money-market accounts would now be worth zero, wiping out people's savings (that doesn't even take into account the devastating affects on the stock market).
Actually, now that I think about it, they may actually know this: Gainfully employed people don't usually vote for leftists.
G20 defers decision on financial transaction tax
In an unusual hard-hitting statement issued last week, German chancellor Angela Merkel criticized G20 nations which are opposed to the proposal of a financial transactions tax.
“It can’t be that those outside the eurozone, who have pressed us time and again to take comprehensive action on the debt crisis, are at the same time working together to resist the introduction of a financial transaction tax,” said Merkel.
“I don't think this (opposition) is acceptable … We must ensure that financial market actors share in the costs of fighting the crisis. I will push for this until it happens, at least in Europe, even better worldwide,” she added.
There are enough transaction charges on swing and day trades as it is.