It wouldn't affect trades as much as it would the constant "churning"
the original purpose of the stock market was for investors to buy
shares of a company and then share in the profits via "dividends"
this gradually became perverted to a system of speculation (gambling) where the value of the stock was the route to profit.
No money "disappears" when a stock price falls, because the high price was transfered to the person who sold the stock in the LAST trade before the value fell.
If I had say 10,000 shares of a stock and sold it to you when the value was $100/share, you'd pay me $1million, then if the value
fell to $50/share you'd only be able to sell it for $500,000 but
I'ds till have the full million in my pocket.
That's the problem with speculation and gambling, sometimes you lose.
You buying the stock were betting that the price would rise, while I selling it was betting that the price would fall.
I won you lost, so suck it up.
The problem is that the "gambling" system we have is regarded as NORMAL
it's the whole "flip this house" mentality
it is NOT a sound basis on which to built a world economic system
That it has survived as long as it has defies logic and
Look up "Tulip Mania" on wikipedia, it'll improve your understanding of my general disgust with the intelligence of my fellow man.
a $50 tax would clean out all the small "investors" and greatly reduce the "churn" factor, and basically eliminate the market chaos.
some broker trading 100,000 shares of stock would care less about
a $50 tax, the idiot trading with his retirement fund would.
Fact is that the small investor (ignoring the rare exception) will eventually lose it all
What they should do is eliminate capitol gains taxes for individuals
because taxing people who invest rationally or the small buisness man who wants to pass the buisness onto a son is STUPID.
We are the only industrialized nation on earth that charges
capitol gains taxes on interest income on a savings account!
THAT is rediculous.