Center for Capital Markets Competitiveness Letter Announcing Study, "Examining the Main Street Benefits of Our Modern Financial Markets"
March 17, 2010
To The Members of the United States Congress:
On Thursday, March 11, the U.S. Chamber of Commerce Center for Capital Markets Competitiveness released a new study, Examining the Main Street Benefits of Our Modern Financial Markets. The Study, conducted by Charles Jones, the Robert W. Lear Professor of Finance and Economics at Columbia Business School, and Erik Sirri, a Professor of Finance at Babson College and former director of the SEC Division of Trading and Markets, takes an in-depth look at how the evolution of our modern financial markets have reduced the cost trading for all investors, expanded investment opportunities for American families, and improved access to capital for U.S. businesses. The study also examines how seemingly small changes such as a financial transactions tax would cause considerable damage far from Wall Street. In addition, the Chamber released a poll that shows that most Americans oppose taxing all stock trades and similar financial transactions, including stocks purchased by mutual funds on behalf of investors and future retirees.
Taxing financial transactions will do nothing to create jobs. It will hurt average investors, reduce savings, and make it harder for America's job creators to recover from the economic crisis. Today's highly liquid markets make it possible for average investors to get the best price and pay dramatically lower transactions costs when they buy and sell stocks. And, with more investment, they fuel the capital needs of businesses of every size. Both proponents and opponents of the financial transaction tax agree it would reduce the number of financial transactions by at least 50% by doubling the costs.
According to the independent poll of 800 U.S. registered voters by Lombardo Consulting Group from March 10, 2010, 70% of respondents said that they opposed or strongly opposed a tax on stock trades and similar transactions, with 61% of respondents agreeing that new taxes on banks and other financial institutions would "just do more damage to the economy".
If you have any questions or concerns, please call Jonathan Jachym at (202) 463-3119.
President and CEO, Center for Capital Markets Competitiveness (CCMC)