High-frequency Stock Trading Tax

% Green:
85.40
% Yellow:
9.80
% Red:
4.80
Voting Detail:
Plenary
% Ratified:
0.00

Party Commentary

Resolution is consistent with messaging and adopted policy. This resolution expands on the party's policies proposing a Tobin tax on currency transactions (G08-p026: Tobin Tax to Increase Foreign Aid), and a Robin Hood tax on all international banking transactions (G10-p23 Robin Hood Tax).

Preamble

Whereas high-frequency trading has been shown to increase stock market volatility, and

Whereas high-frequency trading is the most extreme perversion of the stock market’s original purpose of the efficient allocation of capital to productive and well-managed enterprises, and

Whereas high-frequency trading serves no productive purpose in the economy, and is indeed parasitic on it, and

Whereas high-frequency trading serves to enrich the wealthiest sectors of society at the expense of the rest,

Operative

BE IT RESOLVED THAT a Green government will enact a tax of 0.02 percent on all stock transactions in which the stock is held for a period of less than a second. This tax rate and the trading interval will be reviewed on an annual basis.

Sponsors:
Jacquie Miller, Brigitte Hayes, Bob MacKie, Teri Hague, Sharon Forrester, Jack Thornburgh, Jocelyn Gifford, Susan Sheane, Bob Baynham, Jordan Bober, Jan Slakov, Rumiko Kanesaka, Jonathan Dickie, Tom Mitchell, Paul Roberts, Matthew Clarke, Dona Mackie, Mike Nickerson, Chris Dixon, Constantine Kritsonis

Background

Stock trading by computers in which stocks are held for periods of less than a second began around the turn of the century and as of 2012 is estimated to account for half of all equity trading. In the financial community opinions on the effects of this are mixed, but there is serious concern that high-frequency trading is contributing to market volatility.

Whether or not it has this effect, it is certain that this kind of equity trading is a perversion of the stock market’s primary function: the efficient allocation of capital to productive, well-managed enterprises.
Indeed, it is the purest form of speculation, and firms engaging in this practice can be considered parasites on the overall economy, producing nothing and reaping substantial profits. On 3 September 2013, Italy
introduced a tax of this kind. Ten other EU countries are considering similar measures. This resolution expands on the party's policies proposing a Tobin tax on currency transactions (G08-p026: Tobin Tax to Increase Foreign Aid), and a Robin Hood tax on all international banking transactions (G10-p23 Robin
Hood Tax).

Wikipedia entry on High-frequency Trading
http://en.wikipedia.org/wiki/High-frequency_trading

Forbes.com discussion on High-frequency Trading
http://www.forbes.com/sites/richardfinger/2013/09/30/high-frequency-trad...

CNBC article on Italy’s decision to tax high-frequency trading
http://www.cnbc.com/id/101002422

Article (18.03.2014) on the New York Attorney-General’s concern about
high-frequency trading
http://www.reuters.com/article/2014/03/18/us-highfrequency-nyag-idUSBREA...

Code

G14-P02

Proposal Type

Policy

Submitter Name

Brian Smallshaw

Party Commentary

Resolution is consistent with messaging and adopted policy. This resolution expands on the party's policies proposing a Tobin tax on currency transactions (G08-p026: Tobin Tax to Increase Foreign Aid), and a Robin Hood tax on all international banking transactions (G10-p23 Robin Hood Tax).

Preamble

Whereas high-frequency trading has been shown to increase stock market volatility, and

Whereas high-frequency trading is the most extreme perversion of the stock market’s original purpose of the efficient allocation of capital to productive and well-managed enterprises, and

Whereas high-frequency trading serves no productive purpose in the economy, and is indeed parasitic on it, and

Whereas high-frequency trading serves to enrich the wealthiest sectors of society at the expense of the rest,

Operative

BE IT RESOLVED THAT a Green government will enact a tax of 0.02 percent on all stock transactions in which the stock is held for a period of less than a second. This tax rate and the trading interval will be reviewed on an annual basis.

Sponsors

Jacquie Miller, Brigitte Hayes, Bob MacKie, Teri Hague, Sharon Forrester, Jack Thornburgh, Jocelyn Gifford, Susan Sheane, Bob Baynham, Jordan Bober, Jan Slakov, Rumiko Kanesaka, Jonathan Dickie, Tom Mitchell, Paul Roberts, Matthew Clarke, Dona Mackie, Mike Nickerson, Chris Dixon, Constantine Kritsonis

Background

Stock trading by computers in which stocks are held for periods of less than a second began around the turn of the century and as of 2012 is estimated to account for half of all equity trading. In the financial community opinions on the effects of this are mixed, but there is serious concern that high-frequency trading is contributing to market volatility.

Whether or not it has this effect, it is certain that this kind of equity trading is a perversion of the stock market’s primary function: the efficient allocation of capital to productive, well-managed enterprises.
Indeed, it is the purest form of speculation, and firms engaging in this practice can be considered parasites on the overall economy, producing nothing and reaping substantial profits. On 3 September 2013, Italy
introduced a tax of this kind. Ten other EU countries are considering similar measures. This resolution expands on the party's policies proposing a Tobin tax on currency transactions (G08-p026: Tobin Tax to Increase Foreign Aid), and a Robin Hood tax on all international banking transactions (G10-p23 Robin
Hood Tax).

Wikipedia entry on High-frequency Trading
http://en.wikipedia.org/wiki/High-frequency_trading

Forbes.com discussion on High-frequency Trading
http://www.forbes.com/sites/richardfinger/2013/09/30/high-frequency-trad...

CNBC article on Italy’s decision to tax high-frequency trading
http://www.cnbc.com/id/101002422

Article (18.03.2014) on the New York Attorney-General’s concern about
high-frequency trading
http://www.reuters.com/article/2014/03/18/us-highfrequency-nyag-idUSBREA...