for $100,000, and financing it with a loan, the bank and I agree that in one year's time we will net the following two obligations: (a) I owe them the interest that a $100K loan would have earned them, plus the amount, if any, by which 150 shares of Apple stock declined in value during the year; (b) they owe me an amount equal to the dividends paid plus the share appreciation, if any, for 150 shares of Apple stock during the same one-year period. Counter-party risk aside, this is economically equivalent to my buying the 150 shares for the $100K loan. So, if we don't tax it under our FTT -- or even, like the European Commission's proposal, if we tax it at a much lower rate (relative to the $100K "notional principal amount") than a stock sale -- we are simply telling people to replace stock sales with total return equity swaps. But what about all sorts of other derivative instruments (which can of course be mixed and matched with the above swap if you like)? E.g., an interest rate swap: in one year, I'll pay you the amount that I would have owed you on a $100K loan at a fixed interest rate, and you'll pay me the amount that you would have owed me on a $100K loan at a floating rate. Had we done the actual transaction (the offsetting loans) rather than the swap, the FTT wouldn't have hit us. So here the derivative is