I dislike this idea for many reasons.
It is apparent that FTTs tend to reduce liquidity and force investors into fewer but larger and more bundled trades, which of course tends to increase volatility. This is quite the opposite of what original proponents thought FTTs might do. And in a marketplace as active as that in the US, investors will simply clear their trades elsewhere. Like maybe on an offshore oil platform...
We need to bear in mind that the main reason why people are even considering FTTs in the U.S. right now is because of the rise of concerns with regard to high frequency trading (HFT). The simple(istic) idea is that the taxes could function as a sort of knob to control trading frequency. But the real culprit for the flash crashes is algorithmic trading, not HFT per se, and there is a big difference. Moreover, there should be more focus on 'circuit breaker' approaches to prevent flash crashes. In any case, this discussion is still very active and the case is certainly not closed i.e. there is no consensus that FTTs would actually improve the situation. They could actually make it worse by amplifying volatility.
All that aside, what most annoys me about this proposal is that it not only raises big technical concerns but also appears to violate some basic principles:
(1) We desperately need a much simpler tax code that is far easier to administer. The current code is hideously complex- so much so that the amount of tax you can avoid is proportional to how many lawyers and accountants you can afford. The code is so complex that most of us don't even know what our effective tax rates are. We need a much more efficient tax code, and this proposal would be a big misstep in the opposite direction. And note, it wouldn't have any effect at all on the largest investors who move the most capital- they have many ways around it. If the cost is significant, I guarantee that large investors will simply clear their trades outside US jurisdiction. It's the small investor who would be disproportionately affected.
(2) I really don't like the idea of having tax sourced and revenue spent in two widely different compartments of the economy. For example, what might makes sense is to have a gas tax that generates revenue to fund road maintenance and better technology to reduce fuel consumption and pollution. That would make sense, and it might even makes sense to opponents of higher taxes... once they are confronted with declining road quality. In other words, we should try to keep costs and consequences as close together as possible, so that it's clearer to voters that they get what they pay for. Ah, transparency! What doesn't make sense is to link two wildly different things e.g. the volatile equities marketplace... and education. The latter is all about low-risk, ultra-stable, predictable, long-term (lifetime) investment. There is an inconsistency of logic.
(3) The idea that politicians might try to increase funding for something -even education-without actually declaring that to be their intention is totally unacceptable to me. If you want to increase funding for higher ed then say so... transparently. Hiding it behind some abstract tax that is easy for the wealthiest investors to evade and which can have consequences that most people don't even understand, that is irresponsible politics. It's deliberately obfuscatory politics. This is the same nonsense that disturbed me with regard to proposals to fund education via lottery revenue. Frankly, I could care less whether we have lotteries or not- it's a fools tax that I'll never pay anyway. But if a competent politician looked me in the eye and articulated why I need to dig a bit deeper into my pockets to help educate our young people, well then I would support a higher tax. And, like most Americans, I am very bothered that no politicians are stepping up to the plate to articulate the need for better policy and more investment in our kids' preparation.