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

Quote from rsikit:

The DeFazio bill has been referred to the House Ways and Means Committee. "We have no plans at this time to hold hearings on the bill," said Matthew Beck, a spokesman for the committee.



That is a very recent statement from House Ways and Means regarding the new defazio bill HR 4191 This article is from today traders magazine.

http://www.tradersmagazine.com/news/transaction-tax-wall-street-104707-1.html
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Very good piece - thanks for posting that. I'm kind of bothered by this statement in the piece:

Treasury Secretary Timothy Geithner, in a recent interview on Bloomberg Television, said he favors the STT idea provided it wouldn't hurt the individual investor. "I have not seen a version of that that I think works," Geithner said.

I don't think he said he favors a STT - I think he favors an insurnace type levy against the banks (not on transactions)...

I also didn't like this from Pelosi:

But this time the bill has the support of the Speaker of the House, Nancy Pelosi. She said it has "a great deal of merit." She also said the U.S. might convince its foreign trading partners to make the STT a global tax.

I truely hope the US isn't going to try and convince it's foreign trading partners to make this a global tax. Thats just nuts.

-Guru
 
Quote from listedguru:

Very good piece - thanks for posting that. I'm kind of bothered by this statement in the piece:

Treasury Secretary Timothy Geithner, in a recent interview on Bloomberg Television, said he favors the STT idea provided it wouldn't hurt the individual investor. "I have not seen a version of that that I think works," Geithner said.

I don't think he said he favors a STT - I think he favors an insurnace type levy against the banks (not on transactions)...

I also didn't like this from Pelosi:

But this time the bill has the support of the Speaker of the House, Nancy Pelosi. She said it has "a great deal of merit." She also said the U.S. might convince its foreign trading partners to make the STT a global tax.

I truely hope the US isn't going to try and convince it's foreign trading partners to make this a global tax. Thats just nuts.

-Guru
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Like the Politico article last week, this article is full of mistakes and/or sloppy reporting. We all saw Turbo's interview, and he clearly doesn't support any form of trans tax. Pelosi never said she supports Defazio's bill, only an international form of the tax. You'll also notice that this Trader's article seems to imply that futures and other derivatives would be taxed at 0.25% -- wrong again.
 
‘(1) STOCKS- There is hereby imposed a tax on each covered transaction in a stock contract of 0.25 percent of the value of the instruments involved in such transaction.

‘(2) FUTURES- There is hereby imposed a tax on each covered transaction in a futures contract of 0.02 percent of the value of the instruments involved in such transaction.

‘(3) SWAPS- There is hereby imposed a tax on each covered transaction in a swaps contract of 0.02 percent of the value of the instruments involved in such transaction.

‘(4) CREDIT DEFAULT SWAPS- There is hereby imposed a tax on each covered transaction in a credit default swaps contract of 0.02 percent of the value of the instruments involved in such transaction.

‘(5) OPTIONS- There is hereby imposed a tax on each covered transaction in an options contract with respect to a transaction described in paragraph (1), (2), (3), or (4) of--

‘(A) the rate imposed with respect to such underlying transaction under paragraph (1), (2), (3), or (4) (as the case may be), multiplied by

‘(B) the premium paid on such option.
 
(4) CREDIT DEFAULT SWAPS

I'm surprised that none of the recent articles about this bill have mentioned anything about idea of taxing credit default swaps. Correct me if I'm wrong, but since these instruments aren't currently regulated or really even tracked in a manner transparent enough to be able to know the full value of the transaction, how is it even conceivable that they can be taxed?
 
Another thing is why the huge percentage on stocks (0.25%) compared to everything else? Stock traders need to be punished above and beyond everybody else! Stock traders are the cause of the financial crisis! What BS.
 
Quote from sprstpd:

Another thing is why the huge percentage on stocks (0.25%) compared to everything else? Stock traders need to be punished above and beyond everybody else! Stock traders are the cause of the financial crisis! What BS.
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I don't understand that either. Defazio has mentioned in the past about evil derivatives, etc - why arn't they proposing to tax the hell out of those? Not that they should tax any of this but damn...

-Guru
 
Quote from listedguru:

HR 4191 -

Here's a link where you can track Defazio's newest transaction tax bill:

http://www.govtrack.us/congress/bill.xpd?bill=h111-4191

According to the link HR 4191 has been referred to the following committies:

House Ways and Means
House Rules
House Budget

By contrast HR 1068 was only referred to the House Ways and Means Committee - not sure if thats significant or not?

-Guru
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I noticed when you click on: :http://www.govtrack.us/congress/bill.xpd?bill=h111-4191

It says the last action was it was referred to the House Budget Committee.

Also when you view Committee Assignments it lists the House Rules Committee - Both Michael Arcuri (D) NY and Ed Perlmutter (D) CO sit on that committee - both of these guys are co sponsoring this bill...

-Guru
 
You can sense the momentum for the possibility of a transaction tax is slowing, I think, in terms of number of articles and overall energy.

I see 2 reasons

(1) The better than expected employment report on Friday

(2) The fact that earlier than expected TARP payback funds can be used as funds for a "jobs" bill or something like a jobs sill which isnt called that.

None of this means we don't need to be vigilant going forward, as the economic winds are quite variable at present. But it is at least a short term positive.

I for one was very glad to read the Germany news over the weekend.
 
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