Unintended consequences alert: read up on the UK stamp duty on UK equity trades. Goldman Sachs creates a derivative security matching the return of the underlying equity that you can trade with GS and avoid paying the stamp duty. Net result: GS makes money, less liquidity for the average investor. Rock on transaction taxes.

The European Union is seriously considering adding a 0.1% tax against trades in stocks and bonds (and an 0.01% tax on derivatives). It would definitely curb HFT, and there's talk of it also generating needed revenue. The main criticism is that a transaction tax distorts the market in hard to predict ways, and that big players may work around it. The English Wikipedia article has a decent summary of the proposal status: http://en.wikipedia.org/wiki/European_Union_financial_transa...

It's not really his idea, but it's probably a good one. I remembered it as being called a Tobin tax, but that really only applies to currency exchange. Instead, it's just a securities transaction tax: http://en.wikipedia.org/wiki/Financial_transaction_tax#Secur... .