In case the day comes and everyone is beginning to realize that this tax might become inevitable, you must push your senators that it is implemented in a fair manner, i.e. like the proposed Tobin Tax [0.0001% - 0.001% with NO EXEMPTIONS] instead of the unfair nonsense that is floated now [0.25% for -in fact- private persons only, GS and the other creators of 2008 desaster are EXEMPT]
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1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
Quote from gerry875:
how would they justify an exemption for those few big players?
I don't know how they justify it, but here's one recent example. Defazio's attempt earlier in the year to punish evil energy speculators (HR 3379) has the following exemption:
â(c) Exception for Commercial Traders- The tax imposed by this section shall not apply to any transaction if--
â(1) either party to the transaction is--
â(A) classified by the Commodity Futures Trading Commission as a commercial trader with respect to oil, or
â(B) a financial institution acting on behalf of such a party (but only if the financial institution does not at any time acquire ownership of the security), and
â(2) the transaction is a bona fide hedging transactions (within the meaning of section 4a(c) of the Commodity Exchange Act).
Quote from local_crusher:
In case the day comes and everyone is beginning to realize that this tax might become inevitable, you must push your senators that it is implemented in a fair manner, i.e. like the proposed Tobin Tax [0.0001% - 0.001% with NO EXEMPTIONS] instead of the unfair nonsense that is floated now [0.25% for -in fact- private persons only, GS and the other creators of 2008 desaster are EXEMPT]
I agree.
Elizabeth MacDonald: Why Taxing Wall Street to Create Jobs Won't Work
A House bill now being drafted would raise $150 billion each year to pay for new manufacturing jobs by taxing securities transactions such as stocks, options, derivatives and futures.
But the effect here would be the polar oppositeâit would hurt job creation and retirement savings, as the fees will get passed along.
Congress knows that taxes donât create jobs, economic growth does. "Cut taxes and regulations so that the engine of job growth â small businesses â can be more confident about the future and decide to expand and hire," says Richard Karlgaard, publisher of Forbes Magazine. "Respect private property. Don't degrade the currency. Don't tear up loans."
Just this past July, President Barack Obama floated the idea of taxing securities at a news conference, but for a different cause: to raise money for a âkittyâ to pay for winding down too-big-to-fail companies, not for a slush fund that would let government bureaucrats pick and choose which jobs to create.
http://emac.blogs.foxbusiness.com/2009/11/25/why-taxing-wall-street-to-create-jobs-wont-work/
A House bill now being drafted would raise $150 billion each year to pay for new manufacturing jobs by taxing securities transactions such as stocks, options, derivatives and futures.
But the effect here would be the polar oppositeâit would hurt job creation and retirement savings, as the fees will get passed along.
Congress knows that taxes donât create jobs, economic growth does. "Cut taxes and regulations so that the engine of job growth â small businesses â can be more confident about the future and decide to expand and hire," says Richard Karlgaard, publisher of Forbes Magazine. "Respect private property. Don't degrade the currency. Don't tear up loans."
Just this past July, President Barack Obama floated the idea of taxing securities at a news conference, but for a different cause: to raise money for a âkittyâ to pay for winding down too-big-to-fail companies, not for a slush fund that would let government bureaucrats pick and choose which jobs to create.
http://emac.blogs.foxbusiness.com/2009/11/25/why-taxing-wall-street-to-create-jobs-wont-work/
Quote from local_crusher:
In case the day comes and everyone is beginning to realize that this tax might become inevitable, you must push your senators that it is implemented in a fair manner, i.e. like the proposed Tobin Tax [0.0001% - 0.001% with NO EXEMPTIONS] instead of the unfair nonsense that is floated now [0.25% for -in fact- private persons only, GS and the other creators of 2008 desaster are EXEMPT]
You're dreaming here ! The government will do, what the government wants to do. Do you remember when they outlawed online Poker back in 2007 with the woefully-crafted UIGEA law, by attaching a 23rd-hour rider to the Ports bill that was destined to pass ?? It wasn't even debated in Congress, but that rider was attached to a bill that had absolutely no chance of not passing, and that was totally unrelated to the major portion of the bill (the Ports Act). Bush signed the bill, without even wincing or making refernce to the UIGEA tack-on. Congress will do this again, and our President will turn deaf ears to the process, and will sign such a bill, since he is extremely Pro-Wall Street (antithesis of his campaign rhetoric), and is looking at anything to make a dent on this horrific debt of ours.
Revshark yet again
http://www.kendallharmon.net/t19/index.php/t19/article/26685/#more
One of the things many people overlook in the discussion of a tax on trading is how different the market is today than it was before the Internet and all its associated technologies were developed. Trading has been greatly democratized over the years -- now just about anyone can be a trader and earn a living in the market if they have a little capital and are willing to work hard.
Fifteen years ago you had to be live and work in one of the major financial centers if you wanted to be a "real" trader. There was no way someone like me sitting on the beach in Florida or the hills of North Carolina could participate in the market. Now we can all become self-sufficient if we have the desire and inclination to do so.
The Internet made trading an even playing field, and as a result a major industry developed around it to assist the man on the street who wanted to participate in the markets. I know many individuals who now consider trading to be their primary job. They run small businesses that support them and their families, employ people and pay substantial taxes on their profits. Instead of using stock brokers, people now do research on their own using the many sites and tools available on the Internet, which has created productive businesses like TheStreet.com and RealMoney.
http://www.kendallharmon.net/t19/index.php/t19/article/26685/#more
One of the things many people overlook in the discussion of a tax on trading is how different the market is today than it was before the Internet and all its associated technologies were developed. Trading has been greatly democratized over the years -- now just about anyone can be a trader and earn a living in the market if they have a little capital and are willing to work hard.
Fifteen years ago you had to be live and work in one of the major financial centers if you wanted to be a "real" trader. There was no way someone like me sitting on the beach in Florida or the hills of North Carolina could participate in the market. Now we can all become self-sufficient if we have the desire and inclination to do so.
The Internet made trading an even playing field, and as a result a major industry developed around it to assist the man on the street who wanted to participate in the markets. I know many individuals who now consider trading to be their primary job. They run small businesses that support them and their families, employ people and pay substantial taxes on their profits. Instead of using stock brokers, people now do research on their own using the many sites and tools available on the Internet, which has created productive businesses like TheStreet.com and RealMoney.
Wall Street survived and thrived during the era of $100 plus commissions.......
Why will this be any different? Yeah, you might not be able to play risk taking cowboy from your basement any longer---- but in the grand scheme of things-----big deal, you will find something else to do......
what about all the carriage drivers and horse businesses put under by the model T? same thing, times change
Why will this be any different? Yeah, you might not be able to play risk taking cowboy from your basement any longer---- but in the grand scheme of things-----big deal, you will find something else to do......
what about all the carriage drivers and horse businesses put under by the model T? same thing, times change
Investors Beware: Taxes on Stock Trades Are Getting Closer
http://seekingalpha.com/article/175232-investors-beware-taxes-on-stock-trades-are-getting-closer
http://seekingalpha.com/article/175232-investors-beware-taxes-on-stock-trades-are-getting-closer
International taxation on all financial transactions will be next....... IMF generated,,,,, its sooner than you think
Per-instrument exemptions will be the hardest ones to justify. In fact, if they ever come up with a production version of the tax, it will most likely contain not only activity-based exemption for market makers (i.e. by revenue, mostly for banks) but also per-instrument exemptions for Forex (again mostly banks, but for reasons of market impact) and Treasuries (guess why). Here's the suggested response.Quote from rsikit: There has not been an instrument that he forgot to tax!
Mr X, are you sure you have thought through all the implications of including derivatives in the transactions tax? Derivatives are instruments whose price is derived (hence the name, so options and futures are already included, may be sensible not to mention them twice) derived from some underlying (base) instruments, which are intentionally left untaxed, such as:
- interest rates / Treasury notes (exempt for reasons of fiscal policy),
- foreign exchange, i.e. Forex (exempt probably because the CRS Report for Congress from 2004 concluded that taxing Forex would not be practicable - tax rates which can be used there without excessive market impact, 0.00006%, would yield too little revenue),
- hybrid instruments, such as exchange-traded promissory notes (ETNs) which derive their value from a basket of futures contracts - are these taxed stocks? or untaxed bonds? or perhaps taxed derivatives?
Taxing one form of the same instrument and leaving untaxed another (such as exempting Forex while taxing Forex futures) would lead to inintended consequences, including not only benign ones such as fiscal arbitrage performed by the lucky exempted few at the at the cost of the paying public, but - more likely - to the total abandonment of the taxed form (e.g. the volume dropping by half in exchange-traded currency futures, very much like trading in Swedish stocks, half of which started trading in London after they were taxed), with an obvious impact on the projected fiscal revenues. What if all taxed instruments, including US stocks are re-invented in a tax-neutral, very low-capital-intensive but highly-volatile form? What if exchanges come up with some completely new form of very volatile instruments that will not require much taxable capital, while retaining the usual profit potential for the traders? Who will give our stocks those penny-tight spreads if every short-term trader switches to an untaxed venue such as Forex, art, gold bars, or simply an offshore stock exchange in some now suddenly 'rogue' state? Will you also ban international capital movements?
And how about the issue of tax fairness of specifically excluding derivatives which help finance the Government debt? Because these will surely get a special exemption as well, just like the market making firms and Forex trading banks? Won't it then become apparent that your tax is aimed solely at those who cannot fight your mighty powers, i.e. at those who generate most jobs in every economy: at small businesses and sole traders. Because well-capitalized firms and the Government have already secured appropriate exemptions to protect their interests (banks for Forex/market making and Government for Treasuries trading).
So is there really any non-populist, rational basis for this tax? Or is it entirely about gaining political capital at the cost of the least powerful members of the electorate - those small individual traders who dare to compete with the big banks to fulfill their American dream of financial independence free from Government-sponsored employment programmes? Because the 'big boys' - market making firms, Forex trading banks, and Treasury selling Uncle Sam seems to have already created cozy shelters from this tax. How fair is that?
Where can we finally see the scientific basis for this tax? Because the original Tobin (1974) version, i.e. the tax on foreign exchange transactions, 30 years later is no longer a practicable idea, according to for instance the aforementioned report for Congress from 2004 (Order Code RL32266). So please answer how much revenue is it projected to raise? Will the additional revenues surpass those lost on the capital gains tax? And was the additional unemployment in the financial industry and among individual traders duly taken into account, including its multiplier effect on the rest of the economy?