Illustration: Aïda Amer/Axios

The financial transactions tax, or FTT, is also known as a "Tobin tax," after James Tobin, the Nobel laureate who proposed a small tax on currency transactions in 1972. It's a popular way of raising revenue: The UK has had such a tax for decades, and there's a good chance that France's existing tax could be extended to encompass the entire EU.

Driving the news: The tax is also popular on the American left, and this week Brian Schatz, a U.S. Democratic senator from Hawaii, proposed his version of it: a flat 0.1% levy on the sale price of all stocks, bonds and derivatives.

  • FTTs are more effective in larger markets, because those taxes are harder to circumvent. If the U.S. simply signed on to the Franco-German proposal, that would create a global tax capable of funding ambitious global climate-change initiatives.
  • An FTT would reduce high-frequency trading, which is an activity loved by precious few. High-speed algorithmic trading contributes to a key risk in the market — that a "flash crash" could wipe out trillions of dollars of wealth in a matter of seconds.

The bottom line: Schatz's bill is not going to pass with this Senate and this president. But as we enter the 2020 race, expect most Democratic candidates to include an FTT on their list of revenue opportunities.

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