[quote=pri_dk]Buying a stock, or anything, with cash does not impact the money supply. The cash just moves from the buyer to the seller.
The more important issue regarding taxes /fees on trading is that the increased transaction costs will reduce liquidity, which as many adverse repercussions.[/quote]
Taking cash from a checking account and buying stock does impact the money supply. Trading one stock for another does not.
I’m not sure how a 1/4 pt transaction fee (or even 1/2 a point if its both sides) will substantially reduce liquidity. I suspect it would slightly decrease turnover. It would only reduce liquidity if the markets came to a screeching halt as a result. I have shares of stock to sell and there is no market for them as a result of the tax. Aint gonna happen.
