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

Quote from rsikit:

I agree that Defazio's bill would not pass without exemptions, but thats what happens when congress and senate debate the bill they will fine tune it. There will be exemptions, but now as I hear some rumblings there will be exemptions for market making but they will be very strict with it in other words the big banks get what exemptions are needed for market making but prop firms will not get it. For example if goldman has the exemption which we know they ultimately would, it doesnt flow through every aspect of their company. From what I hear those who will offer up exemptions if this bill even makes it that far, will constitue that a market maker make a continuous 2 sided bid and offer as by definiation of a market maker during business hours to get the exemption.
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i hear ya riskit but i am also hearing that the market making function now is anonymous through ecns compared to the old days so anybody can make a two sided market i do it all day long. if i wanted to trade the lse right now through sterling i could without a tax cuz the member firm i trade through is a member of the lse.
 
Quote from rsikit:

Good old Switzerland, what I do not like is how this past year US has started closing off loopholes in tax system to switzerland. I am afraid Swissy might be afraid to take US business or may bow to US when it comes to whatever tax laws we want to pass
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Yeah, the world against the Swiss. Some chance they won't cave in. We need to ring every alarm bell everywhere we can.
 
(Forgive me if this has already been covered in this thread, but I have only just joined ... if this HAS already been covered earlier, just point me back there, and I'll go back into my hole ...)

If we are now saying that this tax is "dead" because one group of market participants (MMs) could not function properly, aren't we missing something?

Couldn't banks simply be exempted from the tax when they act in their capacity as dealers/agents, but be subject to the tax when they act in their capacity as principals/ speculators/ investors/ hedgers/ asset exchangers/ etc? A new type of "chinese wall" ... It would just take a new regulator (or an existing one with new powers), and a clarification of the "rules", to police which transactions were on each side? And then the politicians could point to how they had succeeded in taxing the "speculators ... who got us in to this mess ... ".

I don't think it would be too problematic for politicians/legislators to carve out the market making function, and still get the banks (and hedge funds, VCs, and PE funds) for a big chunk of new tax ... (and of course wipe out the retail speculator at the same time!).
 
Quote from Xspurt:

Yeah, the world against the Swiss. Some chance they won't cave in. We need to ring every alarm bell everywhere we can.
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"Ring every alarm bell" is exactly right. Sign every petition you can find and contact your Congressional representatives. Call. Fax. Email. Be polite, but state your case clearly. The momentum is shifting away from this tax, but if we get complacent bad things will happen.
 
Quote from abattia:

(Forgive me if this has already been covered in this thread, but I have only just joined ... if this HAS already been covered earlier, just point me back there, and I'll go back into my hole ...)

If we are now saying that this tax is "dead" because one group of market participants (MMs) could not function properly, aren't we missing something?

Couldn't banks simply be exempted from the tax when they act in their capacity as dealers/agents, but be subject to the tax when they act in their capacity as principals/ speculators/ investors/ hedgers/ asset exchangers/ etc? A new type of "chinese wall" ... It would just take a new regulator (or an existing one with new powers), and a clarification of the "rules", to police which transactions were on each side? And then the politicians could point to how they had succeeded in taxing the "speculators ... who got us in to this mess ... ".

I don't think it would be too problematic for politicians/legislators to carve out the market making function, and still get the banks (and hedge funds, VCs, and PE funds) for a big chunk of new tax ... (and of course wipe out the retail speculator at the same time!).
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So the logic would be to reward the banks with market dominance......and to garner a monopoly on all securities ?

How logical is that for a populist that wants to get back at banks ?

Giving them more...and taking even more from the retail....?

Logical ?????
 
Quote from libertad:
So the logic would be to reward the banks with market dominance......and to garner a monopoly on all securities ?
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There would still be competition among banks, but in any case if there was considered to be a monopoly among dealers, then that would be the regulator's role to police ... no different to telephone/utility/postal/lottery "monopolies", and the need to regulate them.

It may be heresy to say so in this forum, but I think it's mistaken to overplay the "sympathy" Joe/Joanna Public feels for the retail daytrader/swing trader.

We are just speculators, and (unless we are value traders, information-oriented technical traders, arbitrageurs, or other so-called "informed traders"), it can easily be argued that - as a trader class - we don't make prices more informative nor add liquidity to the market (in fact, it can easily be argued we do the opposite) ... so who is going to mourn our passing?

We are an easy target.
 
Libertad, you are getting redundant...

Market Making function can exist with a 0.01% tax. Spreads just have to be 0.03% and higher for MMs, for example.

A lot of illiquid markets with Market makers have spreads way bigger than this tax.
 
Quote from TraDaToR:

Libertad, you are getting redundant...

Market Making function can exist with a 0.01% tax. Spreads just have to be 0.03% and higher for MMs, for example.

A lot of illiquid markets with Market makers have spreads way bigger than this tax.
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Yeah....so the initial logic is to tax banks....

In order to not tax banks ?

So now the question becomes....what should the amount of the tax be ?


ie .05%...... .01% etc....?????

An amount that does not affect market making ?

So what amount is that ?

And who does this penalize ?

Does it penalize the banks or retail ?

So the logic is to move further and further away from penalizing the banks ?

Why shouldn't the govt. just form its own ecn....to compete with the other ecns...????

Form a new world wide direct access exchange in the name of efficient capital ?????

No taxes of any kind ....

Something that might actually improve current economics ????

Make policing easier.....and create an evergreen govt. income ?

With a 10 year depression looming.....this type of logic ....

is logical.....whereas not encouraging capital and not taxing those responsible.....is not logical....
 
Quote from abattia:
...We are just speculators... so who is going to mourn our passing?
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Our final collective act (before we vanish into oblivion) may be a short position in the retail brokerages ...
 
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