This analysis doesn't even make sense. "The actual financial transaction tax burden to this 401(k) holder will be considerably less than this $100 for two reas

This analysis doesn't even make sense. "The actual financial transaction tax burden to this 401(k) holder will be considerably less than this $100 for two reasons. First, not all of the tax will be passed on to investors. The industry will have to bear part of the burden in lower fees." Why is this assumed to be true? Fees on managed funds are quite opaque to begin with, most people with a 401k have no idea what funds they have let alone what fees they charge. The market is also not one where buyers (i.e. - holders of 401ks) are free to choose from sellers generally. Most 401ks are not self directed, they have certain authorized funds. Therefore, there is likely not sufficient mobility for competition amongst fees to take place. This entire part of the article is incomprehensible to me: "In this case, the cost of the tax to this 401(k) holder would be entirely offset by the savings from trading less. Let’s say that it cost this person 0.5 percent a trade before the tax is imposed. In that case, the tax will have doubled their trading cost. The expected result is a 50 percent reduction in trading volume. Instead of trading $20,000 of stock a year, they will only trade $10,000. The savings from reduced trading are equal to, or quite possibly larger than, the tax paid by this 401(k) holder. Before the tax is put into effect, the holder is paying $100 in trading costs on $20,000 in trades each year. After the tax is in place the holder is paying $100 (including the tax) on $10,000 in trades. The holder is now paying more for each trade, with the 0.5 percent tax added in, but is paying no more in total for trades each year. The financial industry effectively eats the full cost of the tax." This assumes that the previous statement is true that fees are reduced to cover the taxes. In addition, the idea that there will be "savings" from introducing this new tax is ridiculous. This is the type of thinking that causes people to spend $50 more buying things online in order to get $15 off. You aren't "saving" money by spending more! "Every trade has a winner and a loser, a buyer that paid too much for a stock, or a seller got too little." What? Nobody is a winner or loser in a stock transaction. There is just a buyer who wants in at a given price and a seller who wants out at a given price. The fact that the impact on liquidity is hand waved away in the final 3 paragraphs by just saying "these guys are rich anyways" is ridiculous. A decrease in liquidity due to HFTs being taxed will undoubtedly hurt consumers with increased bid-ask spreads which, ironically, will result in the maligned HFTs being able to scalp even more profit.