Transaction Tax Proposals Not Gaining Much Headway

Earlier this week, two Democrats introduced financial transaction tax bills that would throw the breaks on high-speed trading strategies if they ever became law.

The bills - which were written by Sen. Tom Harkin, D-Iowa and Rep. Peter DeFazio, D-Ore. - would levy a 0.03 percent tax on stock and bond trades. The tax would also include derivatives and options transactions.

As I said last month, due to staunch Republican opposition in both chambers of Congress, such a tax has almost no chance of becoming law in the United States. The issue is also front and center in Europe as the G20 summit kicks off in Cannes this week.

French President Nicolas Sarkozy is spearheading a push for pan-European transaction tax that could raise up to $78 billion a year, money that would reportedly be used to fund projects in developing countries. However a European tax is unlikely as well.

Reuters contends that Germany is now lukewarm towards the idea after initially supporting it. The U.K. is against a European tax, but would open to the idea if were passed through on a global level. But that is also highly unlikely. In addition to the Czech Republic, Canada, the U.S., China and Japan are all reportedly against a global financial transaction tax.