A Bad Idea Returns: Trading Tax Floated Again

In this economy, Democrats are having a tougher time than usual in snooping out tax honey pots to stick their paws into. Thus, they're returning to one they were after earlier this year: the stock trading tax.

Thankfully, they're "only" asking for .1% -- that's right, just one-tenth of one percent. Problem is, you'll pay a much heavier toll than that tiny-sounding levy might suggest.

Last time around-- in February of this year-- they were trying to sell it as a "fair" tax on the investment world with the hilariously-named "Let Wall Street Pay for Wall Street's Own Bailout Act of 2009." True story.

This time, it should come as no surprise that they're selling it in a more traditional way: as a soak-the-rich tax that only greedy Wall Street Gekkos will pay for.

"Small and medium-sized investors would hardly notice such a tax," says this mindless article from The Hill. Really?

On a $10,000 stock transaction, it would amount to just $10... no big deal, right? The problem is: on a $1MM transaction it amounts to $1000 dollars, and since the mutual funds that millions of Americans hold in their 401(k)s, for example, make numerous transactions of that size and beyond literally every day, that giant sucking sound you'll hear will be your investment returns going straight to Washington.

So much for Obama's promise not to raise taxes on 95% of Americans.

Maybe this rotten idea can be beaten back because Wall Street won't just take this lying down. You shouldn't either.