What if the tax applied to government bonds as well?

The Future of Capitalism replies:

Good question! As a revenue-raiser, it's probably better than some alternatives (such as a tax on Brooklyn-based bloggers) and worse than others (such as getting rid of the home mortagage tax deduction). I'd prefer to raise the revenue another way, or by cutting spending. But I think what is driving this is less budget-closing and more a deeper animus toward traders, speculators, hedge funders, the financial industry, investment banks. There I think the answer is, rather than bailing out Goldman Sachs and then punishing them with taxes, don't bail them out in the first place. If the idea is to discourage short-term trading in favor of long-term investment, we already privilege long-term investment over short-term investment with different rates on long-term and short-term capital gains. I don't see the need to tilt the playing field yet more to long-termism, and I do think there's a risk that some of these trading activities will just move offshore (which is why it's senators from states with no financial industry to lose who are the ones pushing it). I'd need to look at whether this transaction tax would also apply to venture capital and private equity transactions, too. Almost any tax has distorting effects. As described, for example, the tax applies to stock transactions of $100,000 or more. Wouldn't people then be tempted to break their stock sales up into chunks of $99,000 and sell them a chunk each year? It just prevents people from acting according to their underlying economic interest and drives them to behave according to they way they are being buffeted by the tax code.