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1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
Here are the three main problems:
* Low cost
index funds would be hurt. Far from discouraging excessive risk taking, the tax would discourage long term index fund investing in favor of riskier strategies. The Vanguard 500 Index fund, as Mike Santoli pointed out in Barrons, would have paid $34 million on a financial transaction tax of 0.25% in 2007 because it bought and sold a total of $13.6 billion of securities that year. This would double the expenses of the fund, punishing conservative investors and encouraging them to seek greater returns through more risk.
* Banks would respond by becoming riskier. The bailout fund created by the tax would discourage appropriate risk management by the firms who pay the tax and disincentivize creditors from monitoring the risk at those firms.
* Taxpayers would still be on the hook. The bailout fund would be a fiction. All money collected would be spent by politicians for current spending programs. It wouldn't be "saved" for future expenditures in any real sense. This means that future bailouts would be funded by taxpayers despite the existence of the tax.
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The problem with this article is these are not the strongest arguments against the tax, although number one if rephrased could be part of one.
The thing that needs to be stressed is the way it hurts the average person and their futures as well as the economy.
* Low cost
index funds would be hurt. Far from discouraging excessive risk taking, the tax would discourage long term index fund investing in favor of riskier strategies. The Vanguard 500 Index fund, as Mike Santoli pointed out in Barrons, would have paid $34 million on a financial transaction tax of 0.25% in 2007 because it bought and sold a total of $13.6 billion of securities that year. This would double the expenses of the fund, punishing conservative investors and encouraging them to seek greater returns through more risk.
* Banks would respond by becoming riskier. The bailout fund created by the tax would discourage appropriate risk management by the firms who pay the tax and disincentivize creditors from monitoring the risk at those firms.
* Taxpayers would still be on the hook. The bailout fund would be a fiction. All money collected would be spent by politicians for current spending programs. It wouldn't be "saved" for future expenditures in any real sense. This means that future bailouts would be funded by taxpayers despite the existence of the tax.
[/B][/QUOTE]
-------------
The problem with this article is these are not the strongest arguments against the tax, although number one if rephrased could be part of one.
The thing that needs to be stressed is the way it hurts the average person and their futures as well as the economy.
French Mins Want Global Financial Tax To Fund Development-Report
PARIS (Dow Jones)--The world's leading economic countries should implement a coordinated tax on the financial services sector to help fund sustainable development, two French government ministers said Tuesday, in an article for a French newspaper.
In calling for a global tax on the financial sector, Finance Minister Christine Lagarde and Foreign Minister Bernard Kouchner said they aren't urging the adoption of a so-called Tobin Tax on foreign exchange transactions, noting that such a levy would be aimed only at stabilizing erratic currency markets.
The tax "concerns financing development without disturbing financial transactions," the ministers said, adding that "a tax of 35 cents per EUR1,000 would be painless and wouldn't be without consequence for the developing world."
The officials made their statements in an op-ed piece in Tuesday's editions of French national daily Le Monde.
http://online.wsj.com/article/BT-CO-20091201-703541.html
PARIS (Dow Jones)--The world's leading economic countries should implement a coordinated tax on the financial services sector to help fund sustainable development, two French government ministers said Tuesday, in an article for a French newspaper.
In calling for a global tax on the financial sector, Finance Minister Christine Lagarde and Foreign Minister Bernard Kouchner said they aren't urging the adoption of a so-called Tobin Tax on foreign exchange transactions, noting that such a levy would be aimed only at stabilizing erratic currency markets.
The tax "concerns financing development without disturbing financial transactions," the ministers said, adding that "a tax of 35 cents per EUR1,000 would be painless and wouldn't be without consequence for the developing world."
The officials made their statements in an op-ed piece in Tuesday's editions of French national daily Le Monde.
http://online.wsj.com/article/BT-CO-20091201-703541.html
No Shortage Of Progressive Policies To Create Jobs AND Lower Deficit
⢠Financial transaction tax. EPIâs American Jobs Plan is financed entirely through a financial transaction tax beginning three years after implementation, which would pay for the entire program. Brad DeLong thinks that it must be applied everywhere in the world at once or jobs from the financial sector would leak, but 1) they wouldnât be missed and 2) the world has already proposed this kind of tax, only to be rebuffed by Timothy Geithner. Some Democrats continue to fight for this policy, which would assess a tiny tax on all stock, futures, derivatives and other trades. Peter DeFazio and Ed Perlmutter have even come up with a catchy name: âLet Wall Street Pay for The Restoration of Main Street Act of 2009.â
The financial transactions tax is basically a tax on speculators â practically nobody else would feel it, and it would discourage rampant trading that has no social utility and needlessly burns through capital that could go to job creation ends. It would slow down the casino on Wall Street and raise tens of billions.
http://news.firedoglake.com/2009/12...ve-policies-to-create-jobs-and-lower-deficit/
⢠Financial transaction tax. EPIâs American Jobs Plan is financed entirely through a financial transaction tax beginning three years after implementation, which would pay for the entire program. Brad DeLong thinks that it must be applied everywhere in the world at once or jobs from the financial sector would leak, but 1) they wouldnât be missed and 2) the world has already proposed this kind of tax, only to be rebuffed by Timothy Geithner. Some Democrats continue to fight for this policy, which would assess a tiny tax on all stock, futures, derivatives and other trades. Peter DeFazio and Ed Perlmutter have even come up with a catchy name: âLet Wall Street Pay for The Restoration of Main Street Act of 2009.â
The financial transactions tax is basically a tax on speculators â practically nobody else would feel it, and it would discourage rampant trading that has no social utility and needlessly burns through capital that could go to job creation ends. It would slow down the casino on Wall Street and raise tens of billions.
http://news.firedoglake.com/2009/12...ve-policies-to-create-jobs-and-lower-deficit/
Quote from ksharmon:
French Mins Want Global Financial Tax To Fund Development-Report
PARIS (Dow Jones)--The world's leading economic countries should implement a coordinated tax on the financial services sector to help fund sustainable development, two French government ministers said Tuesday, in an article for a French newspaper.
In calling for a global tax on the financial sector, Finance Minister Christine Lagarde and Foreign Minister Bernard Kouchner said they aren't urging the adoption of a so-called Tobin Tax on foreign exchange transactions, noting that such a levy would be aimed only at stabilizing erratic currency markets.
The tax "concerns financing development without disturbing financial transactions," the ministers said, adding that "a tax of 35 cents per EUR1,000 would be painless and wouldn't be without consequence for the developing world."
The officials made their statements in an op-ed piece in Tuesday's editions of French national daily Le Monde.
http://online.wsj.com/article/BT-CO-20091201-703541.html
This is where the french make me laugh and why they do not get taken seriously. Atleast when brown talks about the tax , people listen, when the french do no one blinks. 2 days ago they wanted a transaction tax with Brazil to help the Amazon, now they want for the developing world, when will they understand the US wont fund the develping world.
Quote from GreenTraderTax:
I've notice that most of the advocates for the financial-transaction tax argue itâs a fair way to reduce casino-type speculative trading (they refer to it as betting). But nothing could be further from the truth. Day and swing traders are using advanced technologies to analyze markets and carefully think out their trades. They are not spinning a roulette wheel and betting, as some argue.
Any attempt, no matter how well thought out and objective, to show that trading is not gambling is going to be seen as a rationalization that will only reinforce the oppositions stance.
The only way to combat this sort of thing is to personalize it. It has to shown that it is a tax that will harm everyone, regardless of stripe.
Further, arguing that jobs will be lost in the financial sector only works for certain politicians. That argument won't work on main street.
This has to focus on the factors that hit everyone in the pocketbook. From reducing the annual returns on their 401K and pension to the company they work for (or own) being impaired in their ability to raise cheap capital.
This tax is a punishment that stops legal behavior, and has nothing to do with funding government as studies show the net revenue will be negative.
If someone is committing an illegal act, punishment must be given after a jury trial, it's unconstitutional otherwise.
Quote for the day:
..."the Banks and Stock Exchanges are more flourishing than ever before....We are not fighting Jewish or Christian capitalism, we are fighting every capitalism: we are making the people completely free..."
- Adolf Hitler
Speech of April 12, 1921
If someone is committing an illegal act, punishment must be given after a jury trial, it's unconstitutional otherwise.
Quote for the day:
..."the Banks and Stock Exchanges are more flourishing than ever before....We are not fighting Jewish or Christian capitalism, we are fighting every capitalism: we are making the people completely free..."
- Adolf Hitler
Speech of April 12, 1921
Cramer reverses his stance on stock-trade levy
http://www.nypost.com/p/news/business/no_tax_holiday_sVt8LxJeCRvhthtwaugnuJ#ixzz0YRZTiBTU
After spending much of the Thanksgiving weekend on the defensive, TV loudmouth and well-known stock picker Jim Cramer yesterday backed away from supporting a congressional proposal to tax stock trading as a way to pay down the national debt.
"I am against the trader tax," Cramer declared yesterday on MSNBC's "Morning Joe" show. "I don't want this tax because it will discourage people from coming back into the market."
The comments marked an abrupt turnabout for the 54-year-old former hedge fund manager and host of CNBC's "Mad Money." Last week Cramer triggered a firestorm from fans, traders and subscribers to his financial Web site, TheStreet.com, when he threw his support behind a Democrat-proposed plan to charge a 0.25 percent tax on the sale and purchase of stocks and other securities as a way to finance job growth and pay down the deficit.
roponents of the tax, which is part of a broader bill called "Let Wall Street Pay for the Restoration of Main Street Act," say it could raise between $50 billion and $150 billion.
That led Cramer last Tuesday to tell fellow CNBC host Erin Burnett, "If this can help create some jobs, then I am in favor it, and if people are against that or against me for saying that I am pro-jobs, they got a real problem because they are just dead wrong and selfish."
His comments infuriated individual traders who tend to be the stock jockey's staunchest supporters. They argued that the tax would put them out of business.
Angry comments poured into TheStreet.com, and Cramer complained he was the target of death threats.
The outcry got loud enough that Cramer began backpedaling Friday while the rest of the nation was eating leftover turkey.
He denied being a supporter of the tax in response to comments from James DePorre, a Bradenton, Fla., money manager and writer for TheStreet.com, who has launched a petition against the tax.
"Elsewhere on [TheStreet.com] site I have been a subject of character assassination by one of our own. . . who is claiming that I am a proponent of this trader tax, which I do not want," Cramer said of DePorre. "I resent this attempt to paint me as the supporter of this trader tax. I am shocked that one of our own would attack me for it."
Yesterday, however, the two appeared to have mended fences, with Cramer posting DePorre's petition on TheStreet.com and signing it.
"At my urging, the editors have put up [DePorre's] petition against the trader tax. As I mentioned, and will repeat, I am not in favor of the tax," Cramer said in a posting yesterday.
DePorre told The Post that he's glad Cramer now opposes the tax, but that he "would much prefer that Mr. Cramer share our worries and concerns about how dangerous this tax is."
The latest dust-up comes at an inopportune time for Cramer, whose reputation has sustained a few dings this year at the hands of people like Jon Stewart, who blasted Cramer for downplaying the seriousness of the financial meltdown.
http://www.nypost.com/p/news/business/no_tax_holiday_sVt8LxJeCRvhthtwaugnuJ#ixzz0YRZTiBTU
After spending much of the Thanksgiving weekend on the defensive, TV loudmouth and well-known stock picker Jim Cramer yesterday backed away from supporting a congressional proposal to tax stock trading as a way to pay down the national debt.
"I am against the trader tax," Cramer declared yesterday on MSNBC's "Morning Joe" show. "I don't want this tax because it will discourage people from coming back into the market."
The comments marked an abrupt turnabout for the 54-year-old former hedge fund manager and host of CNBC's "Mad Money." Last week Cramer triggered a firestorm from fans, traders and subscribers to his financial Web site, TheStreet.com, when he threw his support behind a Democrat-proposed plan to charge a 0.25 percent tax on the sale and purchase of stocks and other securities as a way to finance job growth and pay down the deficit.
roponents of the tax, which is part of a broader bill called "Let Wall Street Pay for the Restoration of Main Street Act," say it could raise between $50 billion and $150 billion.
That led Cramer last Tuesday to tell fellow CNBC host Erin Burnett, "If this can help create some jobs, then I am in favor it, and if people are against that or against me for saying that I am pro-jobs, they got a real problem because they are just dead wrong and selfish."
His comments infuriated individual traders who tend to be the stock jockey's staunchest supporters. They argued that the tax would put them out of business.
Angry comments poured into TheStreet.com, and Cramer complained he was the target of death threats.
The outcry got loud enough that Cramer began backpedaling Friday while the rest of the nation was eating leftover turkey.
He denied being a supporter of the tax in response to comments from James DePorre, a Bradenton, Fla., money manager and writer for TheStreet.com, who has launched a petition against the tax.
"Elsewhere on [TheStreet.com] site I have been a subject of character assassination by one of our own. . . who is claiming that I am a proponent of this trader tax, which I do not want," Cramer said of DePorre. "I resent this attempt to paint me as the supporter of this trader tax. I am shocked that one of our own would attack me for it."
Yesterday, however, the two appeared to have mended fences, with Cramer posting DePorre's petition on TheStreet.com and signing it.
"At my urging, the editors have put up [DePorre's] petition against the trader tax. As I mentioned, and will repeat, I am not in favor of the tax," Cramer said in a posting yesterday.
DePorre told The Post that he's glad Cramer now opposes the tax, but that he "would much prefer that Mr. Cramer share our worries and concerns about how dangerous this tax is."
The latest dust-up comes at an inopportune time for Cramer, whose reputation has sustained a few dings this year at the hands of people like Jon Stewart, who blasted Cramer for downplaying the seriousness of the financial meltdown.
Quote from ksharmon:
Cramer reverses his stance on stock-trade levy
http://www.nypost.com/p/news/business/no_tax_holiday_sVt8LxJeCRvhthtwaugnuJ#ixzz0YRZTiBTU
After spending much of the Thanksgiving weekend on the defensive, TV loudmouth and well-known stock picker Jim Cramer yesterday backed away from supporting a congressional proposal to tax stock trading as a way to pay down the national debt.
"I am against the trader tax," Cramer declared yesterday on MSNBC's "Morning Joe" show. "I don't want this tax because it will discourage people from coming back into the market."
The comments marked an abrupt turnabout for the 54-year-old former hedge fund manager and host of CNBC's "Mad Money." Last week Cramer triggered a firestorm from fans, traders and subscribers to his financial Web site, TheStreet.com, when he threw his support behind a Democrat-proposed plan to charge a 0.25 percent tax on the sale and purchase of stocks and other securities as a way to finance job growth and pay down the deficit.
roponents of the tax, which is part of a broader bill called "Let Wall Street Pay for the Restoration of Main Street Act," say it could raise between $50 billion and $150 billion.
That led Cramer last Tuesday to tell fellow CNBC host Erin Burnett, "If this can help create some jobs, then I am in favor it, and if people are against that or against me for saying that I am pro-jobs, they got a real problem because they are just dead wrong and selfish."
His comments infuriated individual traders who tend to be the stock jockey's staunchest supporters. They argued that the tax would put them out of business.
Angry comments poured into TheStreet.com, and Cramer complained he was the target of death threats.
The outcry got loud enough that Cramer began backpedaling Friday while the rest of the nation was eating leftover turkey.
He denied being a supporter of the tax in response to comments from James DePorre, a Bradenton, Fla., money manager and writer for TheStreet.com, who has launched a petition against the tax.
"Elsewhere on [TheStreet.com] site I have been a subject of character assassination by one of our own. . . who is claiming that I am a proponent of this trader tax, which I do not want," Cramer said of DePorre. "I resent this attempt to paint me as the supporter of this trader tax. I am shocked that one of our own would attack me for it."
Yesterday, however, the two appeared to have mended fences, with Cramer posting DePorre's petition on TheStreet.com and signing it.
"At my urging, the editors have put up [DePorre's] petition against the trader tax. As I mentioned, and will repeat, I am not in favor of the tax," Cramer said in a posting yesterday.
DePorre told The Post that he's glad Cramer now opposes the tax, but that he "would much prefer that Mr. Cramer share our worries and concerns about how dangerous this tax is."
The latest dust-up comes at an inopportune time for Cramer, whose reputation has sustained a few dings this year at the hands of people like Jon Stewart, who blasted Cramer for downplaying the seriousness of the financial meltdown.
About time this moron came to his senses. He now owes it to us to be a "VERY" vocal advocate against this tax.
what we need to do as traders is forget about us for a second and think about our iras and such and do some computing. example if i contribute the max to my sep ira or roth ira show the percentages do be gained with the tax and without the tax side by side in black and white so main street atleast has some sort of clue as to the difference in figures. if one figure is lets say after 35 years of investing with the tax comes out to 1,000,000 and without the tax comes out to 1,500,000 if any ordinary american is still for the tax than i want to be their money manager, bookie, or spiritual leader because they either are the easiest marks on the planet or they need serious help.