Editor, The New York Times
To the Editor:
Bob Herbert endorses a tax on financial transactions ("Where the Money Is," Jan. 12). Specifically, he wants a very small tax ("say 0.25 percent") on each of the hundreds of millions of such transactions that occur daily. Surely, reasons Mr. Herbert, such a tiny tax on each transaction would do nothing to discourage legitimate financial transactions, while at the same time – because the number of such transactions is so huge – this tax would rake in immense amounts of revenue for Uncle Sam.
Brilliant! But why stop there? Our economy is full of similar revenue-raising opportunities. For example, what about a very small tax – say, 0.25 percent – on each word written by reporters and columnists in newspapers and magazines? Being so small, this tax would not discourage writers from publishing legitimate ideas. And yet, because so very many words are printed each and every day in these publications, government's haul of total revenue from such a tax would be enormous.
What say you, Mr. Herbert?
Donald J. Boudreaux
Don Boudreaux is the Chairman of the Department of Economics at George Mason University and a Business & Media Institute adviser.