Tax would improve stock market

To the editor:

Regardless of the outcome of the primaries and presidential election, at least one proposal should be promoted and adopted: Sen. Bernie Sanders' financial transactions tax, a tiny tax on stock trades. The reason why is not for the revenue, but because it would effectively end the electronic high frequency trading which dominates the stock market.

While most people may believe that stocks are traded by people making decisions about what and when to buy and sell, the vast majority of trades are done automatically by programs that search for tiny fluctuations in stock prices and buy and sell at speeds impossible for any human to process, skimming fractions of cents millions of times a day, making profits flow only to those who can game the system with their stock ‘bots.

The use of these ‘bots also makes the system prone to shocks, especially the frequent 'flash crashes” which can wipe out billions of dollars in capitalization in minutes as automated systems react to other automated systems before a human can react or intervene.

The financial transactions tax would make this system unprofitable and lead to a slower pace for trading, allowing more human oversight and preventing capital from flowing only toward those with the most expensive computer programs.

'Tax” may be a dirty word to many, but this tiny tax would lead to a healthier system.

Amy Collette

Cedar Rapids