Details of a proposed financial transactions tax (also called a stock tax) on the sale or transfer of financial assets have come to light recently, and it’s not good news for traders and investors overall. The new tax sounds small in percentage terms — it’s only 0.25 percent of proceeds and purchases — but it can add up to large sums for day traders and other hyperactive traders, as well as significantly raise expense ratios for mutual funds.

Many active traders have sales proceeds of $10 million or more per year; some have well over $100 million. A 0.25-percent financial-transaction tax on $10 million of proceeds and $10 million in purchases equals a $50,000-tax per year, even if a trader breaks even or loses money.