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A transaction tax does not reduce the demand. It reduces the quantity of transactions that matches the demand and supply. That means it adds friction to the re

by typ 6y ago

A transaction tax does not reduce the demand. It reduces the quantity of transactions that matches the demand and supply. That means it adds friction to the reallocation of resources for more efficient use. It literally encourages hoarding. That is even worse than speculation.

bhupy 6y ago
Why is it that traditional capital gains tax doesn’t function as a transaction tax on equities and securities?
- typ 6y ago
  I am not sure what you mean by "doesn't function as a traction tax". It does create the same incentive for hoarding. I don't see any advantage of it compared with LVT.