This is a terrible idea that for some reason keeps cropping up again and again. The major problem facing the Global Financial System(tm) is not high-frequency trading, it is large, illiquid, unhedged assets held by systemically important financial institutions. The nature of an illiquid asset is that it is traded infrequently, which makes it especially un-affected by a transaction tax.

OTOH, a tax like this may discourage high-frequency trading [despite it not being at all a systemic risk], but it also discourages certain legitimate and extremely useful forms of hedging, such as large notional currency swaps [http://en.wikipedia.org/wiki/Currency_swap]. And in the likely event that some esoteric forms of derivatives are exempt from the tax [they may be executed overseas, or just be exempted from the statute due to lobbying pressure] then it will encourage banks to shift trading activity from actual assets to much-more-fragile derivatives.

Bottom line: it's very likely that the net result of any Tobin Tax type implementation will be to actually make the Global Financial System(tm) more dangerous. And that's assuming you can actually discourage HFT, which is not at all clear. It will probably just migrate to some island that sets up a tax-shelter exchange.

I have no great love for HFT, but this proposal is the epitome of dangerous, populist feel-goodery. It makes no regulatory sense, and the fact that the Europeans keep threatening to hold hands and jump over this cliff together should not make you think that it is in any way good public policy.