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

[wjk]

Quote from gkishot:

If transaction tax bill passes the senate what are the chances that Obama signs it into law?

This should answer your question. The last sentence holds the key.

From "The Hill" last week:

http://thehill.com/homenews/house/69295-dems-push-wall-street-150b-stock-tax

A group of consumer watchdog organizations and labor unions sent DeFazio a letter this week supporting the tax bill.

“Your bill would put Wall Street to work for the public good, by placing a modest securities transaction tax on trades of stocks, options and swaps. A tax on these trades has little impact on the average investor or pension fund because they hold their investments for the long term, but it does disincentivize Wall Street gambling and high-volume short-term speculative trading,” the organizations wrote.

The groups include: Americans for Financial Reform, Public Citizen, the Service Employees International Union (SEIU) and the AFL-CIO, among others.

 

[rsikit]

If this passes the senate I am sure there are no doubts that Obama would sign this into law. The big if,is if it passes the senate. Remember though it has to pass the house as well, so far we have no idea about the house. We will get a better picture this month. Dec 3rd is a jobs summit at the white house so that can tell alot.

 

[JOSEF]

Quote from Tom1am:

Long term investors most certainly can get out of this. If yo trade you pay the tax at the source. You get a credit on you tax return for tax you paid if your trades do not exceed x per year. The broker simply reports this on your 1099 and it is matched at the service center. That will reduce fraud. I am for the tax

The tax will have the effect of putting most, if not all, discount brokers out of business.

Furthermore, with reduced liquidity. the bid/ask spreads will be vastly higher than they are today. The obvious effect of this will higher indirect costs for all long-term investors. This, it is naive to think that long-term investors won't also pay a steep price for this tax.

Finally, the real "big boys" that this tax is after won't be impacted anyway. They will simply move their business to foreign markets that do not have this tax.

 

[JOSEF]

Quote from rsikit:

If this passes the senate I am sure there are no doubts that Obama would sign this into law. The big if,is if it passes the senate. Remember though it has to pass the house as well, so far we have no idea about the house. We will get a better picture this month. Dec 3rd is a jobs summit at the white house so that can tell alot.

My take is that the concern should be reversed. The Dems control the House and there is no filibuster in the House. So, it is probably more likely to pass the house. However, in the Senate we only need 41 senators to stop it. Schumer has already stated he is opposed to it. Him + the other 40 Republicans makes it 41. I am assuming all the Republicans are opposed to it.

 

[TraDaToR]

I thought Geithner said they were working on some sort of domestic insurance fee on banks. I think it would be the right time to put it on congress for the administration. At the same time De Fazio propose his new bill.

Once congressmen understand that it is easier to implement( locate the institution representing a systemic risk and make them pay), fairer as the banks respnsible of the crisis will be the only taxed and that it won't harm liquidity... De Fazio bill will be just dead... A little promotion on TV to make public understand( if needed at all), and De Fazio lame political career is finished...I am sure that the public doesn't explicitely want the Tobin, they just want wall street to pay.

Tell your congressmen about the need of alternative bills. Now, it's sure that finance will have to pay, one way or the other, let it be on banks...

NB:I think it's a real improvement that Brown is softening his position, considering other means than the Tobin.

 

[Ghost of Cutten]

I personally think this has about a 50/50 chance of passing in the next few years. Look at the legislation from the 1930s - that was totally "un-American" socialist and even totalitarian legislation, but because the public were so angry and didn't understand much about economics, it got passed. There were plenty of intelligent people and politicians against the worst excesses, but the crazy shit happened anyway along with the more moderate stuff. Never underestimate the stupidity and vindictiveness of the general public.

I advise anyone who trades for a living to strongly consider alternative career plans, if only as a contingency. There is a pretty good chance most if not all of your trading income will go to zero within 3 years. For sure, you should spend virtually nothing and save as much as possible of your short/medium-term trading income from now on, as you may not get a chance to make that kind of income for quite some time.

Basically, almost all short-term trading will be uneconomical after this tax. Medium-term trading will be significantly more difficult. Only really long-term trading and investing will remain viable.

Life will get a lot tougher for the sole trader if this goes through, I'd expect 95%+ of independent traders to leave the business.

 

[bears21]

Quote from Ghost of Cutten:

I personally think this has about a 50/50 chance of passing in the next few years. Look at the legislation from the 1930s - that was totally "un-American" socialist and even totalitarian legislation, but because the public were so angry and didn't understand much about economics, it got passed. There were plenty of intelligent people and politicians against the worst excesses, but the crazy shit happened anyway along with the more moderate stuff. Never underestimate the stupidity and vindictiveness of the general public.

I advise anyone who trades for a living to strongly consider alternative career plans, if only as a contingency. There is a pretty good chance most if not all of your trading income will go to zero within 3 years. For sure, you should spend virtually nothing and save as much as possible of your short/medium-term trading income from now on, as you may not get a chance to make that kind of income for quite some time.

sounds scary to a trader doesnt it and i agree but you have to adapt, i am starting to look at data and groups that are trading the lse. you can get data feeds for the lse through real tick. connections and the ability to trade london are alot more cost driven than here in the us. but the good news is that the group i know of are american citizens and trade the lse from new york overnight. they are making good coin there plus as you all know london has a stamp tax ala tobin tax on transactions but since their group is a member of the lse they avoid paying such a tax. yes it doesnt hurt to start looking elsewhere to find opportunites. just another feather in the cap. but anybody who thinks trading will just end overnight is fooling themselves as well. the loopholes in this world were made for situations like this.

Basically, almost all short-term trading will be uneconomical after this tax. Medium-term trading will be significantly more difficult. Only really long-term trading and investing will remain viable.

Life will get a lot tougher for the sole trader if this goes through, I'd expect 95%+ of independent traders to leave the business.

 

[TraDaToR]

Quote from Ghost of Cutten:

I personally think this has about a 50/50 chance of passing in the next few years. Look at the legislation from the 1930s - that was totally "un-American" socialist and even totalitarian legislation, but because the public were so angry and didn't understand much about economics, it got passed. There were plenty of intelligent people and politicians against the worst excesses, but the crazy shit happened anyway along with the more moderate stuff. Never underestimate the stupidity and vindictiveness of the general public.

I advise anyone who trades for a living to strongly consider alternative career plans, if only as a contingency. There is a pretty good chance most if not all of your trading income will go to zero within 3 years. For sure, you should spend virtually nothing and save as much as possible of your short/medium-term trading income from now on, as you may not get a chance to make that kind of income for quite some time.

Basically, almost all short-term trading will be uneconomical after this tax. Medium-term trading will be significantly more difficult. Only really long-term trading and investing will remain viable.

Life will get a lot tougher for the sole trader if this goes through, I'd expect 95%+ of independent traders to leave the business.

Now I am depressed. You are one of my favourite poster. I'd prefer you to tell me every country will create CFDs for evrything and TSX, Montreal Exchange, Winnipeg,SGX, HKFE, Soffex, DME will list every CME, NYMEX, Liffe, Eurex product.

Everybody needs to press their edges to the max while it's still possible. No vacation next year.

 

[rsikit]

Time is on our side. They have the best chance to pass this now. The longer it drags out the better for us. The more time then the more other regulations they could pass for the sector as well as the insurance premium the administration likes. We should get more clarity this month as they build the bill for jobs and see what is in there. We might get a glimpse at the jobs summit dec third as well. Obama is going to meet with a variety of people including his economic team, and plenty of outside people. So we might see where things r headed.

 

[gkishot]

Quote from Ghost of Cutten:


I advise anyone who trades for a living to strongly consider alternative career plans, if only as a contingency. There is a pretty good chance most if not all of your trading income will go to zero within 3 years.

Is it possible to sue the government for killing off the source of your livelihood through excessive and unfair taxation?