It's not analogous, much of the buying and selling in finance is done for the purpose of the price discovery process, which is to society's benefit, and for which a carmaker analogy doesn't work at all. See any book on market microstructure. If you ignore the price discovery process completely, then, sure, markets become kind of pointless, but that's beside the point. It's not quite like the usual thing of buying or selling a car.
> much of the buying and selling in finance is done for the purpose of the price discovery process, which is to society's benefit,
I'm pretty sure that "most of the buying and selling in finance" happens for making a profit for said buyers and sellers (not that's anything wrong with that), the associated higher liquidity which presumably helps with "price discovery" is only a side-effect. Assuming a transaction tax actually gets implemented prices would still be "discovered" (they've been discovered just fine since we first started trading using shells and the like thousands of years ago), only that the spread would be higher and the liquidity would be lower.
Trading and Exchanges: Market Microstructure for Practitioners. On the lighter side there is https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Opera... (especially good is its discussion of bucket shops—many swindles that exist today existed back then too). Also, look through Matt Levine's blog to see if he recommends anything. There are also other suggestions here: https://news.ycombinator.com/item?id=1447438 I'd second tptacek's recommendations in that thread, including Shiller's Yale course (it's on youtube).
When a buyer buys a car and plays VAT, the seller gets the VAT they paid on the car refunded. If you do the same with financial transactions, it's essentially adding 0.1% to the capital gains rate. In a sales tax regime, wholesalers are generally exempt from sales tax, as they charge it to the ultimate buyer and remit it to the taxing agency; who is the ultimate buyer of a security?
But this proposal is a transfer tax, as is common for real estate (where transactions are very expensive and slow, prices are opaque, and market makers are few).
A transfer tax would be a drag on everyone who trades in the market, just to punish one demonized industry (HFT); in one fell swoop, everyone's retirement savings, stock based compensation, taxable investments are doing that much worse.
HFT has low barriers to entry, and is intensely competitive, if you want to reduce profit of HFT companies, a better way to do it would be to make it more competitive: reduce the minimum price increment by a factor of ten, and then you'll have firms racing to make a tenth of a penny, instead of racing to make a penny.
And the carmaker still has its profits taxed.
Again: Why should the financial industry be better off? The situation is exactly analoguous.