People are less likely to be irrationally exuberant if there's an up-front cost to trading, no? Having to write a check (to to speak) to the government feels like real money, as opposed to the fantasy of sure-thing future profits that naive margin traders and property flippers may kid themselves into.
>People are less likely to be irrationally exuberant if there's an up-front cost to trading, no?
Stock bubbles promise to return your investment several-fold. See: stocks like Tesla or even Zoom (during the pandemic). A 10% tax isn't going to dissuade anyone from the prospect of making 500%. It will dissuade someone from buying broad-market ETFs or mutual funds that return on the order of 5-8% a year.
People already have trouble stashing away money in favor of immediate consumption. Forcing them to take a loss of 10% immediately upon investment basically makes saving much less attractive, especially if their future is uncertain. If for whatever they had to liquidate their investment they'd suffer a loss of 20% before any gains.
