DeFazio’s proposal would put a tax of 0.25 percent on stock transactions and 0.02 percent on derivatives including futures, options, swaps and credit-default swaps. A transaction of 200 shares at $40 each would result in a $20 tax, compared with a commission of $1 for active traders at Interactive Brokers, Peterffy said. [Nina Mehta and Whitney Kisling/Bloomberg: Stock Tax May Cut Trading Volume 90%, Peterffy Says (29 Jan '10)
So the entire trading apparatus of the United States will collapse? Let's do the numbers: "0.25" percent = .0025 of each trade ($40 here) = ten cents a share traded. Oh yeah, the market will absolutely crash from the weight of the tax. And all those traders out on the street? Kinda like 10,000 lawyers at the bottom of the sea: a good start.
I don't really see a downside here. Tax away.