Of all the proposals I’ve heard of on improving our system of taxes, this one makes the most sense. Yes, taxing transactions in the investment world may seem like a bad idea on its face. However, many states already charge taxes on the sale of goods and services, and I don’t see too many people forgo buying cars, washing machines, or clothes (and that’s with sales taxes of e.g. 6% where I live).

Similarly, a 0.1% tax is extremely unlikely to cause wealthy individuals and corporations stop investing at all, or shift their investments away from the US markets, which are among the largest and most transparent in the world.

Also, while sales taxes on goods and services have the greatest impact on people in the low and middle classes who tend to spend all or most of their income each month, a tax on selling investments would, as you point out, impact the wealthy more, which is as it should be.