Public infrastructure is exactly that...public. It is isn't taxed.
More money would be available for loans with higher velocity. Venture capital already has extremely high velocity...that's why it is even possible for extreme high risk investing to be profitable in the first place.
Where the penalty would be applied to businesses, banks, investment firms sitting on CASH or near cash assets doing nothing. Put those assets to work or tax the hell out of it.
You may be confusing money and capital. Money velocity is almost always good. If someone buys infrastructure bonds and then those proceeds are spent on contractors to build infrastructure (who in turn pay suppliers and employees) you have lots of money moving with velocity.
I am not confusing anything. Increasing the velocity of money is not always good. In fact, under some schools of thought, long-term increases in the velocity of money are neutral-to-slightly-bad.
> If someone buys infrastructure bonds
Increasing the expense of saving capital means increasing the expense of bonds, which decreases the incentive to buy them in the first place.
> you have lots of money moving with velocity.
Uh, no, the tail end of that process does describe consumption behavior, but this situation actually has very little to do with the velocity of money, since we haven't addressed the propensity to spend that money a second time within any finite timespan.
Your clarification is more in line with what I meant.
This is dangerously wrong. No economist would tell you that a high velocity of money is an inherent good, or even that increasing the velocity of money is an unfettered good.
Public infrastructure, mortgages, venture capital, small business loans - all of these are investments, and making it more expensive to hold capital will dry up access to money for these sorts of projects.