A CA Congressman wrote one of our Petition signer/senders the below email reply. I leave out the Congressmanâs name since I did not request permission to use his email on a public thread. I wrote the Congressman the below reply email.
CA Congressman wrote:
âNovember 28, 2009
Dear Mr. X:
Thank you for contacting me regarding your opposition to a transaction tax on securities transactions. Legislation proposed by Mr. DeFazio imposes a modest transaction tax of no more than 0.25 percent on a securities transaction. I believe this is a common sense approach to curtailing speculative trading and financing the bailouts that such speculative transactions have necessitated.
Transaction fees like this have long existed in other countries. For example, the United Kingdom charges a tax of 0.25 percent on the purchase or sale of share of stock. Such a fee has little or no effect on long-term investors, but may cause day traders and speculators to think twice about their trades. That would be a good thing. Our economy has not benefited from investment strategies that turned Wall Street into Las Vegas. Furthermore, the reduction in transactions costs due to the development of computer technology over the last quarter century far exceeds the size of this tax. I believe that a transaction tax is one part of an appropriate strategy for the difficult times we face.â
Green reply email:
Dear Congressman x (D-CA):
Regards and thanks for replying to one of the traders that sent our Petition.
May I refute some of your arguments?
It's not "common sense" to curtail speculative trading. Rather, it could be perceived as government heavy-handed market manipulation to effectively bar short-term market makers (traders) from doing their job to deliver more efficient pricing in the markets for the benefit of the public. See
http://www.greencompany.com/blog/index.php?postid=41 and particularly Wikipedia on Speculation vs. Investment:. Short term traders kick the tires on price each day, wringing out inefficiency, rumor and hype. That reduces bubble conditions. Traders use sophisticated technologies to analyze stocks, and they are not gamblers.
Your action if successful will leave only the major banks as traders and you are then placing the American public's trust in banks for pricing. China also restricts traders, not allowing shorting of stocks and baring the media from writing negative stories on stocks. Is the U.S. government trying to squash one of the checks and balances in our markets, the small-business (making making) traders?
The tax is not "modest", but rather sufficient to put traders out of business. Lost trading jobs will cause loss of Main Street jobs too.
The UK has many exemptions on their stamp (transaction) tax with a credit on income tax too. Are you going to exempt the big banks from this tax and only kill jobs for small-business traders? That's the reverse of what Americans want; they want a bank levy on Wall Street and to allow small-business traders to continue their important role in the markets.
Wall Street is not Las Vegas. Main Street traders make a living or add to their living by trading online and they never go near Wall Street. Just look at all the signers on our Petition
http://www.rallycongress.com/greentradertax-traders-association1/ to see the comments and Main Street addresses. The vast majority of signers live in your state of CA. Is CA's safety net ready to help them out, after you contribute to them getting fired from their trading jobs?
Are you also going to pass a transaction tax on gambling transactions (or raise existing taxes on it)?
Placing a tax on transactions to take the placeholder of productivity gains is not the American way.
Please reconsider this harmful move. The end result with be lost tax revenue, lost jobs on Main Street, more pain for many families and more inefficient, expensive and dangerous financial markets.
Thank you for your consideration, time and honorable service to our country.
Take care,
Robert A. Green, CPA
xxxxxx
