1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
Don't you have to pay a pretty steep penalty every time you make a withdrawl from an IRA (assuming you're under retirement age)?
Yes PowerBallad its a 10% penalty. I trade the IRA now and I am under retirement age. I do not take out of it but if it was the only way I can trade then so be it I pay an extra 10% in taxes. That stinks but still better then the alternative. Again, this is last case scenario for some. I have traded in my IRA for a while, not equities becuase you need the margin and cannot short all things you cannot do with an equities broker. But you can do with a futures and forex broker here in the US. I would rather pay an extra 10% then not trade at all.
Yes, it would, and I guarantee you the day this tax gets past, <b>none of my clients will be invested in anything but annuities.</b>
It's not just you I want to address, but my statements at http://www.advisorworld.com/2009/02/18/the-real-threat-to-americas-economic-survival/ about this tax, are that it is the real threat to America's economic survival. 50% wouldn't cover how unattractive equities would become in this situation. While they will always be priced rationally, this tax would remove so much liquidity that our volumes overnight would probably be less than half of what you see today.
Far from trader's being a so-called "non-productive" unit, trader's liquidity is the reason that stocks have been less volatile since the decimalization of the stock market. If you ask me, we had this tax once before. It was called 0.06 per share commissions charged to most customers for even placing one stock trade.
These transaction costs were so high that they actually prevented securities from being perfectly priced. The economic distortion of such a transaction tax would be devestating to every part of modern financial markets. Overnight, everyone should just take their money out, and put it in a CD, annuity, or savings account, and/or money market. I would wait years before ever getting my clients back in.
It's no secret everyone should hit "sell, sell,sell" if this transaction tax passes. It'll be a near perfect arbitrage, too. Sell probably with a herd, and watch as the market crashes 50%. Wait two years, then get back in before they realize the catastrophic mistake they made. I can already see it coming, but it does not look like this will pass.
These reps should <b>all be voted out of office for high treason to the American Capitalist System....every single one of them.</b>
Rep Braley, Bruce L. [IA-1] - 4/2/2009 Rep Capuano, Michael E. [MA-8] - 2/13/2009
Rep DeLauro, Rosa L. [CT-3] - 2/13/2009 Rep Edwards, Donna F. [MD-4] - 2/13/2009
Rep Kaptur, Marcy [OH-9] - 3/12/2009 Rep Lee, Barbara [CA-9] - 2/26/2009
Rep Michaud, Michael H. [ME-2] - 4/2/2009 Rep Slaughter, Louise McIntosh [NY-28] - 3/12/2009
Rep Stark, Fortney Pete [CA-13] - 2/13/2009 Rep Sutton, Betty [OH-13] - 2/13/2009
Rep Welch, Peter [VT] - 2/13/2009 Rep Woolsey, Lynn C. [CA-6] - 2/26/2009
Rep Wu, David [OR-1] - 2/13/2009
These reps as well, both are just economically ignorant individuals duped into a lesson in financial stupidity:
Mr. DEFAZIO (for himself, Mr. WELCH, Ms. SUTTON, Mr. CAPUANO, Mr. WU, Mr. STARK, Ms. DELAURO, and Ms. EDWARDS of Maryland)
basically calling out the 9/11 victims and saying that their professions were useless and they served no purpose to society. try going to explain that to the victims families. calling all those traders that worked for cantor fitzgerald parasites. puts a new spin on it when you look at it that way. out of the 3000 victims of the 9/11 attacks about 35% or more were working in the financial industry of some sort.
Could you add citations to these salient facts to the Tobin tax Wiki page at http://en.wikipedia.org/wiki/Tobin_tax ?
I've already added references to Garber (1996), Shvedov (2004), Edwards (1993) and of course Laffer... let's hope the anti-vandalism vigillanties leave them where they are - in the first section
.Our approach is right, mate. I would never again write a single word in support of market efficiency... But sadly few are the scientists who take heed of Bronislaw Malinowski's imperatve of participant observation...
Which is why the mainstream scientists (and hence politicians) always look through a three-decades-old rear-view mirror at financial markets, as this little piece of ivory tower drama illustrates:
Scientist [1]:
"Asymmetric information implies that for many customers, search costs are not trivial, and subjective risk premia are probably important for non-hedged transactors. In addition, dealer-customer spreads in retail transactions are reportedly much higher than 0.1%."
Politician:
"0.25%! Let'em squirm!"
Practitioner:
> Hi,
> IB uses "half pip" price quote for forex, instead of 4 or 5 digits. Is there
> any Java code example about how to round a double price to this "half pip"?
> The TWS order entry UI takes half pip only so I guess for the API order
> methods, it would also take half pip.
> Thanks!
> Jian
Grand Finale:
Scientist misses actual life by 2 orders of magnitude, and Politician forces the tax onto the Congress using best media spin doctors available. Forex grinds to a halt and traders queue in their Maseratis in front of the soup kitchen. Next morning the Wall Street Journal headline shows only these two fatal numbers:
"0.1%" =0.001; "5 digits" = 0.00001
The end
___________
[1] Felix, David, and Ranjit Sau: "On the Revenue Potential and Phasing in of the Tobing Tax" in: Haq, M., Kaul, I., and I. Grunberg (eds), "Tobin Tax: Coping with Financial Volatility" (Oxford University Press, Oxford, 1996), p. 243; Available also in Google Books (books.google.com).
I actually think that Obama is against this tax and that Geithner did in fact speak for the administration. BUT our greatest fear as I see it is the potential for out of control public rage against anything wall st. that will overwhelm reason. The current unemployment situation if it continues(and I believe it will, and in fact get worse next year) definitely has the potential to elevate mob mentality to a level we haven't seen yet. This has been pointed out in the article posted by ksharmon. If the rage politics turn ugly enough to have this legislation actually get past the Senate and onto Obama's desk, then it's a done deal as he will be powerless against the mob tidal wave. By the way, JH(cnbc pol insider) stated that he felt the financial reform legislation will get done before next year's elections as the Dems will need to take a whack at the financial services industry/wall st. specifically as a tonic against the worsening employment picture. Hopefully that whack will be in the form of draconian regulatory measures and will not include the transaction tax but who knows. You know the proponents of the tax will try to leverage the storm. I think it behooves us to prepare for this and perhaps formulate a cohesive plan to counteract.
http://www.cnbc.com/id/15840232?video=1342008944&play=1
Hopefully, any type of action taken, whether it be from our congress, or the G-20/IMF, will be some type of fee's or levy's against the banks, and not a tax on traders. I think that if our congress were really pressured to implement something because of the unemployment situation, I can see them enacting some sort of compromise that would not tax traders, but would go after the banks with more fee's/levy's. I think the Obama administration would be more inclined to go with something like that, instead of a trader tax. Besides, a trader tax is something that would simply not have the Senate votes to pass. Even if the public pressured the Senators to pass it, they still wouldn't, as when was the last time any of them really listened to their constituents? They obviously aren't listening to them regarding this disastrous health care legislation, that the majority of America doesn't want.
My biggest concern of a trader being passed lies not with our congress, but rather the G-20 meeting scheduled for 2010. It seems that the the U.S, Canada, and Russia are the only ones left that don't support the trader tax. Hopefully, none of these countries cave. That is my biggest worry about this tax being implemented, not these yo yo's in congress.