1/4% Tax on all stock trades pushed in NY Times today

Quote from listedguru:

Well I have yet to hear Summers (against tax), Geithner, Dodd, Frank, or even Pelosi come out in support of this tax. I think they know this would be political (and financial) suicide so therefore this isn't going to happen.

-Guru
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Pelosi is definitely for this tax. I've heard her talk about it before, around the time of TARP. In fact, it was the first time I had heard of a "transaction tax". And I have little doubt that Dodd, Frank, or Harry Reid would be for this. And personally, I don't think either Summers or Geithner have the sense God gave a goose.

This tax, if enacted, will have wide ranging impact. It is going to end your career as an active trader, because you won't be able to afford the ongoing fees. As people are driven out, it is going to impact anyone dealing with active traders...brokers, software vendors, exchanges....they're all history.

People will still invest. But the spreads will be wider...so not only will they pay a transaction tax, they'll pay up in terms of the spread on their stock. The remaining brokers will have to raise their commissions...because the volume won't be there to warrant the lower commissions that prevail now. No one is going to need an intraday chart, or a front end software, because they won't be able to consistently afford in-and-out trading.

It's all happened before. In 1986 they changed the tax law to change depreciation rules and other things which destroyed the tax shelter business overnight. Real estate, oil, and computer companies literally were destroyed at the stroke of a governmental pen.

You guys better join me in fighting this tooth and nail, because your career is at stake. And I would encourage you to speak with your brokers and software vendors...their future is at stake too.

OldTrader
 
Quote from FightTheFuture:

0bama said this morning, "We must write and enforce new rules of the road, to stop unscrupulous speculators from undermining our economy ever again."

Decode
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Obama (if this ridiculous bill ever passed) will dislike when all large and small companies, traders both the biggest and smaller, mutual funds, brokerages, and all else regarding this industry leave the country............................I thought Obama wanted to create jobs??????????????

Anything to get elected must be his mantra.

I wonder if he will care about the flight of both companies and all included in the industry from this country.
 
The only jobs that Obama and the current Congress want to create and protect are Union/organized labor jobs.

Except for the guys who clean the buildings where the firms are based, who else connected to this is a union member?

(hey, there's a thought - we should organize and get chartered. Congress would then be throwing money at us left and left.)
 
Quote from OldTrader:

Pelosi is definitely for this tax. I've heard her talk about it before, around the time of TARP. In fact, it was the first time I had heard of a "transaction tax". And I have little doubt that Dodd, Frank, or Harry Reid would be for this. And personally, I don't think either Summers or Geithner have the sense God gave a goose.

This tax, if enacted, will have wide ranging impact. It is going to end your career as an active trader, because you won't be able to afford the ongoing fees. As people are driven out, it is going to impact anyone dealing with active traders...brokers, software vendors, exchanges....they're all history.

People will still invest. But the spreads will be wider...so not only will they pay a transaction tax, they'll pay up in terms of the spread on their stock. The remaining brokers will have to raise their commissions...because the volume won't be there to warrant the lower commissions that prevail now. No one is going to need an intraday chart, or a front end software, because they won't be able to consistently afford in-and-out trading.

It's all happened before. In 1986 they changed the tax law to change depreciation rules and other things which destroyed the tax shelter business overnight. Real estate, oil, and computer companies literally were destroyed at the stroke of a governmental pen.

You guys better join me in fighting this tooth and nail, because your career is at stake. And I would encourage you to speak with your brokers and software vendors...their future is at stake too.

OldTrader
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Old Trader is right. Do not underestimate the ignorance of our elected officials. Anyone that watched Congress question the Bank CEO's last week knows the very low level of financial experience and education regarding the financial industry we are up against.

Don't take this lightly. It can happen. We have a tax and spend majority in Congress with tax and spend new President that does not have a favorable opinion of "Wall Street".

Our saving grace would be an exemption for Market Makers and Exchange Members similar to the one in the UK. But this is not certain so we must fight this tax with vigor.
 
I wonder what Jim Cramer thinks of all this idiocy. Never heard him saying a word about that.
I believe that if he speaks against this tax it would be a powerful message from financial mainstream to the Congress.
 
This is definitely some scary shit. And no way can our elected officials be counted upon to be smart enough to see how destructive this will be to our markets.

Given the alternative, I can see ponying up a dollar or two as an extra commission. But something like 1/4% of the value, in and out, on every trade would pretty much wipe out every day and swing trader. I don't see how you could catch enough profit with that overhead.
 
No, it's not the end of trading. Just trade in a different country and tell the US politicians to go fuck themselves and their "shareholders".


Quote from gkishot:

The end of the day trading as we knew it. They can just outlaw it all together.
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They do not understand that "if you tax something you get less of it".

http://mjperry.blogspot.com/2008/11/if-you-tax-something-you-get-less-of-it.html

Edit: by the way, one of the best blogs IMO.

They probably looked at the trading volumes and calculated how much they can make after imposing a tax. As always, socialists fail to understand that this will dramatically reduce their expected revenue and will at the same time impact liquidity and make markets less efficient.

But hey, for socialists traders and speculators are the easy target. They do not want to accept that they take huge risks to affect price discovery because they ultimately desire to impose price controls and thus traders and speculators are not needed so tax them to death.

I guess the idea is to take the money from the trader and give it to the laid off auto workers. They also think trading activity is inelastic and any tax will not affect volume.

They are wrong, of course.
 
Quote from Wayne Gibbous:

This is definitely some scary shit. And no way can our elected officials be counted upon to be smart enough to see how destructive this will be to our markets.

Given the alternative, I can see ponying up a dollar or two as an extra commission. But something like 1/4% of the value, in and out, on every trade would pretty much wipe out every day and swing trader. I don't see how you could catch enough profit with that overhead.
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It is bad enough that they want this tax to repay TARP when it may not be needed (fingers crossed) but when people like Conyers look at it as a means to fund other programs, that is the scary shit. Make it ok for one thing, why not another.
 
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