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Sure it does. Any investment with an expected return of <1% immediately flips from positive value to negative value for an investor.

The Net Investment Tax is a better way and already exists. It taxes actual gains over a threshold so “the little guy” is unlikely to pay.

"That doesn’t harm investing"

Not true. The cost will be largely passed on from market maker to investor through bid offer spread.

Uh, that's a great idea, has this ever been proposed formally?

Financial transaction taxes have been introduced in any number of countries, the majority of which have ended up repealing them: the tax raised on transactions is outweighed by the loss of capital gains caused by a reduced number of transactions occurring. And in today's global financial system you could end up like Sweden, where introducing an FTT saw 80% of trading move to London within a year...