With a transaction tax in place, the sheer magnitude of high-frequency trades and the tiny margins they pursue will become unprofitable.

The historical evidence on whether reduced liquidity resulting from a transaction tax raises or lowers market volatility — sharp, distortionary movements in prices — is inconclusive. But high-frequency trading has recently become a much larger share of the market, now over 50 percent in some of our busiest exchanges. So while we should proceed with caution, introducing such a tax is likely to reduce excessive liquidity.

Would a transaction tax encourage trading to move offshore, in an era of electronically mobile capital? As the Congressional Budget Office points out, with adequate international coordination, offshore transactions by United States taxpayers could still be captured by a transaction tax, just as an out-of-state Internet purchase can face the sales tax that prevails in the purchaser’s state.

Still, a transaction tax would be more effective if it were adopted worldwide. Fortunately, we may be headed in that direction. Eleven countries of the European Union agreed to implement such a tax, in 2013, though pressure from opponents caused the introduction to be postponed until next year.

It’s also worth noting that transaction taxes of one type or another have long been in place in countries with thriving financial markets, including Britain, Hong Kong, Singapore and many others. So it simply can’t be the case that they’re unworkable.

As you’d expect, the financial transaction tax would be highly progressive, another selling point given our era of high and growing inequality. According to the Tax Policy Center, 75 percent of the liability from the tax would fall on the top fifth of taxpayers, and 40 percent on the top 1 percent. The tax would also fall more on high-volume traders than on long-term investors, of course. And the proceeds could be used for investments to reduce inequality and increase mobility.

There are still many issues to consider. Should the tax fall on buyers, sellers or both? Should government debt be exempt? How, for the purpose of the tax, do you value complex derivatives? One insight from the tax in other countries: Whatever you exempt quickly becomes the security that everyone is trading. So if we want to keep the rate low, we’ll need to keep the base broad.