Paper – HR 4191: Probably Dangerous and Destructive, But Perhaps Merely Useless

Paper – HR 4191: Probably Dangerous and Destructive, But Perhaps Merely Useless
AQR Capital Management’s Clifford Asness, Aaron Brown and Michael Mendelson write that the financial transaction tax proposed by Oregon Representative Peter DeFazio and others would likely hit the superfecta of unintended consequences. Little tax is actually collected, stock prices fall, systemic risks increase, liquidity dries up, and, ironically, credit costs to businesses and individuals rise as banks’ balance sheet capacity gets consumed with favorably taxed-transactions.