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Read the article again. Or at least read it for the first time. Speed is the ENTIRE reason that scheme works. It is the reason why the computers doing the trades need to be located close to the exchanges. It's right there in the name... LATENCY. It means the algorithm has a few microseconds to know what trades are coming, evaluate how they are going to affect pricing, and get in ahead of the trade to make a few pennies.
Personally, I'd like to see this kind of trading - latency arbitrage - be illegal. It was Stockton who raised the issue of taxing it, and I'd say that's fine. I don't know by what method. This has nothing to do with taxing every trade conducted in the normal fashion by normal investors or day traders or even program trades that look at longer term (minutes or hours) market trends.
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