Will a financial transaction tax cause US exchanges to flee?

In this blog post from the Center for Economic and Policy Research, Dean Baker criticizes Bart Chilton, Commissioner at the US Commodity Futures Trading Commission from 2007 – 2014, who in a letter to the editor of the Washington Post,Image Stock Market Trading floor claims “A tax on financial trading activity has been tried in other nations, where it failed miserably”. He states that it would be folly to impose such a tax to fund such programs as free college tuition. Baker deftly dissects this falsehood by noting that many countries of developed economies have such a tax, find it a very lucrative way to fund social programs and do not find it in any way a hindrance on their stock exchanges. Baker goes on to observe that the speed of light arbitrage trades that are so prolific on US exchanges are analogous to using 5 million trucks to transport goods across the country when only a million trucks are required. The tax rate on the transactions are so tiny that the vast majority of Americans who invest in the markets would see no effect upon the net value of their trades. It would serve as a brake on the tiny margins exploited in high speed trading; thereby reducing this rentseeking practice that adds no economic value.