Since we make up a miniscule percentage of the population and a rather unsympathetic part at that, we're going to need to come up with a more compelling reason than that!
1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
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52 weeks later;
I also paid up for some US 1776 stamps. Great trend+ seldom drink tea.
LOL I"M not a real big stamp collector also ; but some are worth a lot, compared to original price....................................................................................................Is this thread still active?
This topic sadly is back in the news again these days: "James Angel, a Georgetown University professor who specializes in market structure and regulation, authored a Chamber of Commerce-funded paper in 2019 that found a financial transaction tax would hurt Main Street by driving up the cost of trading by more than the amount of the tax.
“There is no such thing as a tiny tax that raises big revenue,” Angel said in an interview.
He pointed to how some other countries, most notably Sweden in the 1980s, abandoned such taxes after trading volume vanished and revenue underwhelmed. (Of course, the United States, with its deep financial markets, massive economy and the world’s reserve currency, is not Sweden.)
“It really messes up the market,” Angel said.
https://www.wraltechwire.com/2021/0...our-way-could-be-after-gamestop-stock-frenzy/
This topic sadly is back in the news again these days: "James Angel, a Georgetown University professor who specializes in market structure and regulation, authored a Chamber of Commerce-funded paper in 2019 that found a financial transaction tax would hurt Main Street by driving up the cost of trading by more than the amount of the tax.
“There is no such thing as a tiny tax that raises big revenue,” Angel said in an interview.
He pointed to how some other countries, most notably Sweden in the 1980s, abandoned such taxes after trading volume vanished and revenue underwhelmed. (Of course, the United States, with its deep financial markets, massive economy and the world’s reserve currency, is not Sweden.)
“It really messes up the market,” Angel said.
https://www.wraltechwire.com/2021/0...our-way-could-be-after-gamestop-stock-frenzy/
Now THAT is an interesting idea...
"...Kelleher thinks Congress should focus on taxing orders, not transactions, because a staggering amount of all stock trade orders (some estimates say 99%) are canceled because of high-frequency trading strategies. Critics say those orders are evidence that high-speed traders are manipulating the market by creating the appearance of demand where there is none.
“A financial fee on orders could be the death knell for predatory high frequency trading,” he said. “Everyone will be better off — except for the predators.”
In thinking about how to lower the impact from HFT, I was pondering the idea of order delays, where once an order was placed, it could not be changed or cancelled after a fixed amount of time. Say...5 seconds?
But then I realized that it would create a blocky movement or could be circumvented.
So how about combining the two? You cannot cancel or change an order within 5 seconds of placing it, or it will be charged a small fee?
Like the idea, you could even make it .5 seconds and it wouldn't impact humans. I think the issue you have to overcome is if you apply it to market makers or not. It would be hard to make a market in anything liquid with either an order tax or delay option. So we would probably have to exempt market makers. And what do you know, HFTs now all do whatever they need to in order to meet the new MM definition to circumvent it. That's the tougher nut to crack, but I don't know it's impossible to solve for?
Hillary Clinton proposed something like this (a tax on pulled orders) when she ran for President for what its worth.
It would have little impact on a lot of retail traders I think, directly. Although indirectly all costs are passed on to retail. But shouldn't be too "edge destroying".
But there is a real question about if you drive out HFT from the market how much is liquidity, bid offer spread, volume, impacted? I'm fairly benign to HFT. They kill off a lot of short term edges for traders. But they aren't all bad and I guarantee having them in the market raises a lot more money in taxes than not having them.
You hit on the main issue there which is that the real goal isn't terribly clear. If its to raise revenue, then yeah, you need to set the tax at a level that allows HFT to remain profitable. If it's to curtail HFT, then you have to set it at a higher level that ends up curtailing to the level it doesn't bring much revenue.
Those calling for an FTT aren't a monolith and some have one goal while some have the other. Its convenient to promise both, but the Schumers of this world understand they aren't going to end up with both. Hence my assertion that the move toward an FTT isn't as large as it appears because its made up of two mutually exclusive factions.
https://realmoney.thestreet.com/inv...ion-tax-and-end-weekly-stock-options-15579929 I am ashamed and embarrassed that someone like Doug Kass doesn't know better than this
When Sweden began taxing financial transactions in the 1980s, bond trading fell by 85% and futures trading fell by 98%. By 1990, more than 50% of all Swedish trading moved to London. The tax was declared a failure and repealed in 1991. Recently, Sweden’s Finance Minister Anders Borg quipped “between 90%-99% of traders in bonds, equities and derivatives moved out of Stockholm to London” because of that FTT https://www.modernmarketsinitiative.org/archive/2018/11/13/this-is-a-test-post
And yet the UK today has an FTT of .5% and has had since 1986. So perhaps the lesson isn't so clear.......