You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
Quote from Alvin:
Don't anyone take this lightly. This is a serious threat to the market! This is war, a battle for your livelihood. treat it as such!
Unless the hedge funds and big institutions are involved and rally the small investors behind them I don't see how ET traders can make a difference beyond venting the anger in this forum.
But somehow they are quiet on the issue. Even the prop firms sponsoring this forum are quiet.
Quote from gkishot:
Unless the hedge funds and big institutions are involved and rally the small investors behind themselves I don't see how ET traders can make a difference beyond venting the anger in this forum.
But somehow they are quiet on the issue.
You do what you can but don't take the defeatist attitude that your vote doesn't count! MY vote counts, YOUR vote counts... EVERYONE'S vote contributes to a fierce wall of opposition! They will hear us!
We are mad as hell and we are not taking it anymore!!
We traders add LIQUIDITY to the market! Without this there is no market!
Quote from Alvin:
You do what you can but don't take the defeatist attitude that your vote doesn't count! MY vote counts, YOUR vote counts... EVERYONE'S vote contributes to a fierce wall of opposition!
We are mad as hell and we are not taking it anymore!!
We traders add LIQUIDITY to the market! Without this there is no market!
I doubt that disorganized and divided people have enough political power to lobby anything in congress.
Quote from gkishot:
I doubt that disorganized and divided people have enough power to lobby anything in congress.
Wow, you are already defeated. Surprising defeatist attitude from a successful trader who's usually cut from courageous stock.
I will fight for my job, my livelihood, my passion !
Quote from Alvin:
Wow, you are already defeated. Surprising defeatist attitude from a successful trader who's usually cut from courageous stock.
I will fight for my job, my livelihood, my passion !
Do you want to take charge of grassroots movement to rally the small traders against the bill?
Here is an article going into some detail about the history of the tax.
http://www.taxhistory.org/thp/readings.nsf/ArtWeb/6062A8E3B6C9C7C5852574800
For readers with a historical bent, it's worth recalling that the federal government -- as well as several states -- has repeatedly imposed a tax on the sale or transfer of securities. The first stock transfer tax can be traced to the early Republic, and it reappeared during the Civil War and the Spanish-American War. In 1914, faced with yet another military conflict, Congress again turned to the stock transfer tax. But this time the levy remained on the books for more than 50 years.
The Revenue Act of 1914 levied a tax of 2 cents per $100 of par value on all sales or transfers of stock. The tax was designed principally to raise revenue, not regulate markets. But that didn't stop advocates from predicting that it would also curb speculation.
The tax survived World War I and went on to raise considerable revenue in the bull market of the 1920s. In 1928 Democratic congressional leaders tried to reduce it, suggesting that current rates were unnecessary and excessive. But progressive leaders in both parties rejected the move, complaining that it would encourage speculation. They found surprising but crucial support in the person of Sen. Reed Smoot, a fiscal conservative who supported the transfer tax as a revenue measure. Ultimately, according to historian Cedric B. Cowing, nonfinancial business interests rallied to the cause, preferring the transaction tax to more onerous revenue alternatives.
In 1932, as lawmakers were casting about for ways to raise new revenue in the face of a Depression-spawned deficit, they slated the stock transfer tax for a big increase. Wall Street leaders complained that any hike would be ruinous, and they deployed a variety of arguments to bolster their case. Stock purchases were not speculation, they insisted. And even if they were, it was Ok, because speculation was good for the economy and the nation. And in any case, it was impossible to tell the difference between investment and speculation, so better to leave well enough alone.
Lawmakers were unconvinced, and the Revenue Act of 1932 more than doubled the rates. But Treasury experts remained lukewarm. In general, the tax probably made the revenue system more progressive, concluded economist Carl Shoup in a key 1934 study. But it didn't raise a lot of money, and it probably couldn't be made to produce much more. "Except as a check on speculative activity the tax probably has little to justify it," he wrote. Worse yet, it did a poor job of curbing speculation. "At present rates it probably does not check the kind of speculative activity -- the reckless, foolish activity -- deplored by those who would like to use the tax for this end," he wrote.
Nevertheless, the stock transfer tax remained on the books for another 32 years, disappearing only in 1966 when lawmakers repealed it as part of a broader effort to streamline the tax system. Few observers mourned its passing.
The idea remained dormant until the late 1980s, when both Democrats and Republicans began to ponder its potential. The stock market crash in 1987 had revived interest in the antispeculative potential of financial transaction taxes. Prominent economists published a flurry of papers on the topic, giving it intellectual currency for a few years.
Even more important, however, a federal budget crunch sent politicians in both parties scrambling for new revenue. Speaker of the House Jim Wright offered his support for some sort of financial transaction tax, chiefly as a revenue tool. Even the Treasury Department was reportedly considering it, which at least one observer found amusing. "A securities transfer tax, deliberately designed to create friction in the wheels of commerce, is a strange bird to be hatched by a Republican administration," wrote Washington Post columnist Michael Kinsley in 1990.
Indeed it was. But antispeculation sentiment runs strong in Washington, at least every once in a while. And when juxtaposed with a revenue crunch, it can be a powerful force for innovation. That might be an idea worth watching.
http://www.taxhistory.org/thp/readings.nsf/ArtWeb/6062A8E3B6C9C7C5852574800
For readers with a historical bent, it's worth recalling that the federal government -- as well as several states -- has repeatedly imposed a tax on the sale or transfer of securities. The first stock transfer tax can be traced to the early Republic, and it reappeared during the Civil War and the Spanish-American War. In 1914, faced with yet another military conflict, Congress again turned to the stock transfer tax. But this time the levy remained on the books for more than 50 years.
The Revenue Act of 1914 levied a tax of 2 cents per $100 of par value on all sales or transfers of stock. The tax was designed principally to raise revenue, not regulate markets. But that didn't stop advocates from predicting that it would also curb speculation.
The tax survived World War I and went on to raise considerable revenue in the bull market of the 1920s. In 1928 Democratic congressional leaders tried to reduce it, suggesting that current rates were unnecessary and excessive. But progressive leaders in both parties rejected the move, complaining that it would encourage speculation. They found surprising but crucial support in the person of Sen. Reed Smoot, a fiscal conservative who supported the transfer tax as a revenue measure. Ultimately, according to historian Cedric B. Cowing, nonfinancial business interests rallied to the cause, preferring the transaction tax to more onerous revenue alternatives.
In 1932, as lawmakers were casting about for ways to raise new revenue in the face of a Depression-spawned deficit, they slated the stock transfer tax for a big increase. Wall Street leaders complained that any hike would be ruinous, and they deployed a variety of arguments to bolster their case. Stock purchases were not speculation, they insisted. And even if they were, it was Ok, because speculation was good for the economy and the nation. And in any case, it was impossible to tell the difference between investment and speculation, so better to leave well enough alone.
Lawmakers were unconvinced, and the Revenue Act of 1932 more than doubled the rates. But Treasury experts remained lukewarm. In general, the tax probably made the revenue system more progressive, concluded economist Carl Shoup in a key 1934 study. But it didn't raise a lot of money, and it probably couldn't be made to produce much more. "Except as a check on speculative activity the tax probably has little to justify it," he wrote. Worse yet, it did a poor job of curbing speculation. "At present rates it probably does not check the kind of speculative activity -- the reckless, foolish activity -- deplored by those who would like to use the tax for this end," he wrote.
Nevertheless, the stock transfer tax remained on the books for another 32 years, disappearing only in 1966 when lawmakers repealed it as part of a broader effort to streamline the tax system. Few observers mourned its passing.
The idea remained dormant until the late 1980s, when both Democrats and Republicans began to ponder its potential. The stock market crash in 1987 had revived interest in the antispeculative potential of financial transaction taxes. Prominent economists published a flurry of papers on the topic, giving it intellectual currency for a few years.
Even more important, however, a federal budget crunch sent politicians in both parties scrambling for new revenue. Speaker of the House Jim Wright offered his support for some sort of financial transaction tax, chiefly as a revenue tool. Even the Treasury Department was reportedly considering it, which at least one observer found amusing. "A securities transfer tax, deliberately designed to create friction in the wheels of commerce, is a strange bird to be hatched by a Republican administration," wrote Washington Post columnist Michael Kinsley in 1990.
Indeed it was. But antispeculation sentiment runs strong in Washington, at least every once in a while. And when juxtaposed with a revenue crunch, it can be a powerful force for innovation. That might be an idea worth watching.
Quote from gkishot:
Do you want to take charge of grassroots movement to rally the small traders against the bill?
Long after these politicians are gone and they're lying on the beach collecting their govt pensions, WE have to live with their mistakes.
I, for one, am tired of it! Of their mistakes, their ineptitude, their self servance! Aren't you?
Towards the beginning of the year it seemed like there was a surprising number of supporters of this trans tax here on ET. The market was falling and some apparently believed this tax would make the market go up if you can believe that of all things.
I don't think I have heard any supporters here in the last 5 days since the AFL-CIO stirred things up again. The market has been going up for them enough apparently.
So, are we safe from these traders (traitors) if the market averages +5% every month indefinitely?
I don't think I have heard any supporters here in the last 5 days since the AFL-CIO stirred things up again. The market has been going up for them enough apparently.
So, are we safe from these traders (traitors) if the market averages +5% every month indefinitely?
I guess the only way out of this if one wishes to give 1/2%(in and out) to the government is to just trade cheap stocks.
100k shares of a 1 dollar stock will cost $500 in taxes. If that stock goes up 10 cents you make 10k and the $500 is ok.
Contrast this to 100k of a $100 stock or 1000 shares. It has to go up 50 cents to cover the taxes.
Just thinking is easier to get a dime off a liquid cheap stock with total risk of 100k and potential upside then 50 cents off a more expensive stock that could crater.
I could be looking at it wrong though.
100k shares of a 1 dollar stock will cost $500 in taxes. If that stock goes up 10 cents you make 10k and the $500 is ok.
Contrast this to 100k of a $100 stock or 1000 shares. It has to go up 50 cents to cover the taxes.
Just thinking is easier to get a dime off a liquid cheap stock with total risk of 100k and potential upside then 50 cents off a more expensive stock that could crater.
I could be looking at it wrong though.