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

[jksn922]

Quote from MrPowerBallad:

It would be assessed on the total value of the transaction (more contract per transaction = more tax).

I wonder if this tax would be 0.02% for the entire round trip transaction, or per side? Per side would be suicidal.

 

[lindq]

From the Bloomberg article:

"DeFazio told reporters he thinks the idea will gain traction in the face of Obama administration resistance because it will appeal to ordinary Americans in an era of government bailouts of investment banks. "

The stupidity of that comment is clear in Bernanke's comments this morning that financial institutions are projected to pay back all, or nearly all, of their TARP funds. As many have already done.

BAC's promise to immediately pay back their funds is a big move in favor of congress rejecting a transaction tax.

 

[drukes1234]

Quote from jksn922:

As for the 0.02% tax on derivatives, as long as this was per transaction, and not based on the number of contracts in that transaction, then I could live with that. But still, this tax is a horrible idea, and needs to be fought tooth and nail, because if they did enact a tax, it would do nothing but rise more and more over time.

The 0.25% tax on stock transaction would screw absolutely everything up, don't for one second think there wouldn't be unintended consequences in the derivatives market.

 

[rsikit]

Quote from jksn922:

I wonder if this tax would be 0.02% for the entire round trip transaction, or per side? Per side would be suicidal.

It has been sad a few times that it is .02 per side, so bascially 20 bucks per buy and sell on 100k so 40 dolalr round turn on 100k.

 

[Luckystriker]

The problem with the 0.02% is - it seems considerable (as you can see on this reactions in the thread).
But once they have the foot in the door...

 

[jksn922]

Quote from rsikit:

It has been sad a few times that it is .02 per side, so bascially 20 bucks per buy and sell on 100k so 40 dolalr round turn on 100k.

I'll be applying for Canadian citizenship tomorrow.

 

[Math_Wiz]

Quote from rsikit:

http://money.cnn.com/2009/12/02/news/economy/financial_transaction_tax/

Here is one link and just look for articles there are plenty that state it. We shall see what the bill says when it is introduced today, we can look for it soon I hope.

Thanks. Good link!

+-*/ Math_Wiz

 

[drukes1234]

I do like how DeFazio mentions the Obama administrations resistance to the idea....

 

[TraDaToR]

Quote from jksn922:

I'll be applying for Canadian citizenship tomorrow.

Also took contact with a domiciliation pro in Switzerland yesterday. I get the hell out of France if it comes.

 

[Simex]

Quote from DmanX:

It wouldn't be taxing profit. They already do that and call it an income tax.

Allegedly, they would tax some value of the transaction - like a sales tax. Problem is, futures contracts have no intrinsic value. They have notational value.

There is no buy and hold strategy with futures as they are wasting "assets."

So, let's say they decided on the notational value upon which to base the tax. Take the E-mini S&P 500...

It's notational value is $50 x the index price. So, if the index were at 1000.00, the notational value would be $50,000.

Tax on that, per side, would be $50,000 x .0025 = $125. Or $250 round turn.

So at the quoted price of .02% on the latest posts above mine, RT would be 20$ tax. Quite a cost. I wonder if spreads would widen, and moves would be larger, or if volatility would just die.