1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
I saw this comment/response on the Haiti article:
"I understand your way of thinking on this, but the revenue from this tax will not be as you think because you are assuming that trading will continue as normal. This is probably a very inelastic scenario. You tax and trading grinds to almost a halt, thus revenues from this will be nowhere near anticipated. Secondarily, longer term traders (whatever definition you may think that is) will slow severely as well since spreads will widen dramatically and transaction costs will go much higher (think '70s & 80s). It's not going to be $30 round trip for the average investor with spreads of a few cents (on a typical stock for example), it'll probably be closer to $200 or $300 (just execution costs, not including the tax). No more discount brokers as they exist from liquid markets, not in spite of them. The old way of full service brokers will be the norm. This would go for mutual fund fees as well. They can only operate at low cost due to liquid markets which won't exist as they did. So IRA's, 401K's and "regular" investors will be severly affected. Additionally, the income taxes/capital gains taxes won't be generated from those (evil?
) speculators making "millions and billions", so there will be a severly negative offset to any revenue generated by this tax.
Also, the main purpose of this tax as you say is "to rein in some of the speculative excesses that threaten the financial security of every citizen on the globe". Let's be clear, it's not to help Haiti, it's to satisfy a social agenda on a current populist target. It is very naive to assume that quick trading (seconds to minutes to hours to days) was what led to the disaster....it's laughable to say otherwise. Off exchange trading in "dark pools" and the selling of fundamentally unsound collateralized securities is what caused the trouble. It's because the banks/investment houses, didn't have enough capital to support their structure with such securities and especially since these securities were off exchange in illiquid "markets" and were valued on models, not price discovery. Had they been traded on listed exchanges with sufficient liquidity they wouldn't have been the base for the house of cards. Had they been on an exchange and traded like other securities that speculators are involved with, there would have been much less to worry about. Be real, IBM getting traded back and forth all day (20 times, 10 times 1 time, whatever the case) by a speculator, or bought today and sold tomorrow was hardly the cause of the collapse. Finding someone to blame though is easy, but let's focus on the real issue and not pretend otherwise. "
"I understand your way of thinking on this, but the revenue from this tax will not be as you think because you are assuming that trading will continue as normal. This is probably a very inelastic scenario. You tax and trading grinds to almost a halt, thus revenues from this will be nowhere near anticipated. Secondarily, longer term traders (whatever definition you may think that is) will slow severely as well since spreads will widen dramatically and transaction costs will go much higher (think '70s & 80s). It's not going to be $30 round trip for the average investor with spreads of a few cents (on a typical stock for example), it'll probably be closer to $200 or $300 (just execution costs, not including the tax). No more discount brokers as they exist from liquid markets, not in spite of them. The old way of full service brokers will be the norm. This would go for mutual fund fees as well. They can only operate at low cost due to liquid markets which won't exist as they did. So IRA's, 401K's and "regular" investors will be severly affected. Additionally, the income taxes/capital gains taxes won't be generated from those (evil?
) speculators making "millions and billions", so there will be a severly negative offset to any revenue generated by this tax.Also, the main purpose of this tax as you say is "to rein in some of the speculative excesses that threaten the financial security of every citizen on the globe". Let's be clear, it's not to help Haiti, it's to satisfy a social agenda on a current populist target. It is very naive to assume that quick trading (seconds to minutes to hours to days) was what led to the disaster....it's laughable to say otherwise. Off exchange trading in "dark pools" and the selling of fundamentally unsound collateralized securities is what caused the trouble. It's because the banks/investment houses, didn't have enough capital to support their structure with such securities and especially since these securities were off exchange in illiquid "markets" and were valued on models, not price discovery. Had they been traded on listed exchanges with sufficient liquidity they wouldn't have been the base for the house of cards. Had they been on an exchange and traded like other securities that speculators are involved with, there would have been much less to worry about. Be real, IBM getting traded back and forth all day (20 times, 10 times 1 time, whatever the case) by a speculator, or bought today and sold tomorrow was hardly the cause of the collapse. Finding someone to blame though is easy, but let's focus on the real issue and not pretend otherwise. "
Articles like this are more comical than anything else. Their will continue to be idiots like this that will write articles supporting the FTT. Their reasons for this are to try and keep their liberal base in tact, but that has now been significantly weakened by Republican Scott Brown wining a Senate election in MA, which is one the most liberal states in the country. Obama will now be forced to govern from the center, and although he'll keep up his tough talk about Wall Street, he is now politically weakened big time!!! Even UK Prime Minister Gordon Brown is now starting to back away from the FTT talk, and has been talking about the possibility of the bank levy/fee type proposal that Obama announced last week. Gordon Brown discounted this proposal last week, but now seems interested in it, and will be discussing this with the IMF next week. Perhaps he caught wind of what happened in MA, and knows that his days are numbered in the UK, so all of a sudden he changes tactics.
My e-mail response to William Neil:
Your a blithering moron!!! Losing that Senate seat in MA really hurts doesn't it? A financial transaction tax will not happen, and rightfully so. Obama is now forced to govern from the center with his agenda, and the very people in his administration, such as: Tim Geithner, Larry Summers, and even Rahm Emanual (all of which have deep ties to Wall Street) will never allow a transaction tax to occur. I love all of these idiot, liberal economists that predict a FTT will bring in hundreds of billions of dollars in revenue each year. Oh wait, one week Paul Krugman says the tax would bring in $140 billion a year in revenue, then a week later, he says it would bring in $50 billion a year. lol Liberal FTT lovers like yourself have their heads buried so far up their asses, that it's downright comical to watch their FTT revenue projections change by the billions each week. lol
Even if these delusional, clueless, and now powerless liberals had their way and actually got this FTT, they would soon realize that they wouldn't generate enough revenue from it to feed a goldfish. Why? Because the banks/prop. firms would get their exemptions, the mom and pop traders would be forced out of business, then the remaining players left over would simply choose to not make investments in the U.S. and take their money overseas, which is exactly what I would do. After all that, good luck generating your hundreds of billions in revenue. lol
The liberal base has been weakened significantly by Brown's win in MA, and Obama will have to give in to Independent conservative voices to get their support back, if he doesn't want to see his congressional majorities & presidency implode.
Obama will end up getting the bank fee/levy proposal passed, although it will be significantly watered down after successful lobbying by Wall Street. But dreamers like you, that are in love with a financial transaction tax to pay for climate change, Haiti relief, wiping Pelosi & Reid's assholes, etc............keep on dreaming!!!
Hugs, kisses, and bitch slaps!
A. Speculator
It DOES show just how high the volume of this tax has become.
Interactive Brokers Group Inc Q4 2009 Earnings Call Transcript
January 21, 2010
...
Rich Repetto - Sandler OâNeill
Last question, so you talked about the professional trader and the ISE and the CBOE spots. You talked about some pretty good regulatory things that could help you out, regulatory tailwinds, letâs say. Are there any regulatory headwinds? Like for example, is there anything that, regulation looks like it could help you, but Iâm just trying to make sure weâre covering all like short sale rule or Flash or anything like that. Is there anything in the works that could possibly be a headwind?
Thomas Peterffy
No, the Flash or the short sale wouldnât impact us in anyway. What would kill our business would be the transaction tax.
http://stockwidget.seekingalpha.com...-inc-q4-2009-earnings-call-transcript?page=-1
January 21, 2010
...
Rich Repetto - Sandler OâNeill
Last question, so you talked about the professional trader and the ISE and the CBOE spots. You talked about some pretty good regulatory things that could help you out, regulatory tailwinds, letâs say. Are there any regulatory headwinds? Like for example, is there anything that, regulation looks like it could help you, but Iâm just trying to make sure weâre covering all like short sale rule or Flash or anything like that. Is there anything in the works that could possibly be a headwind?
Thomas Peterffy
No, the Flash or the short sale wouldnât impact us in anyway. What would kill our business would be the transaction tax.
http://stockwidget.seekingalpha.com...-inc-q4-2009-earnings-call-transcript?page=-1
Yeah, but it's been like that for a while now. So when continuing to see stuff like this, I can only laugh. Obama is now forced to govern from the center. If he doesn't, all Independent voter support will go to the GOP in November. The one's screaming for this tax are the liberal, radical people of Obama's base. This is the base that he needs to ignore in order for Democrats to have any chance in Nov. I'm confident the bank fee/levy will pass, although watered down, with some Republicans even supporting it. But as far as a FTT goes, there's no way any GOP Senator, or even fair amount of Democratic Senators would support it. That would be a direct attack on main street, due to Wall Street/Prop. traders getting exempted. There's no way in the world that Wall Street/Prop. traders would not get an exemption. That would then leave main street investors to get nailed by this tax.
Once the IMF comes out with it's recommendations in April, which I'm hopeful will take the form of a global type levy/fee on the banks, in order to avert another crisis. That recommendation certainly won't stop the morons out there still advocating for the FTT, but it would be significant in showing that this FTT would not be feasible.
Let's face it, I don't think we'll ever get to a point where there won't be articles that scream for this FTT. Those advocating for it will "ALWAYS" be around to pester us. I've just accepted that prospect, and no longer worry about every screwball that writes an article or editorial that supports the tax.
Quote from rc822:
My e-mail response to William Neil:
Your a blithering moron!!! Losing that Senate seat in MA really hurts doesn't it? A financial transaction tax will not happen, and rightfully so. Obama is now forced to govern from the center with his agenda, and the very people in his administration, such as: Tim Geithner, Larry Summers, and even Rahm Emanual (all of which have deep ties to Wall Street) will never allow a transaction tax to occur. I love all of these idiot, liberal economists that predict a FTT will bring in hundreds of billions of dollars in revenue each year. Oh wait, one week Paul Krugman says the tax would bring in $140 billion a year in revenue, then a week later, he says it would bring in $50 billion a year. lol Liberal FTT lovers like yourself have their heads buried so far up their asses, that it's downright comical to watch their FTT revenue projections change by the billions each week. lol
Even if these delusional, clueless, and now powerless liberals had their way and actually got this FTT, they would soon realize that they wouldn't generate enough revenue from it to feed a goldfish. Why? Because the banks/prop. firms would get their exemptions, the mom and pop traders would be forced out of business, then the remaining players left over would simply choose to not make investments in the U.S. and take their money overseas, which is exactly what I would do. After all that, good luck generating your hundreds of billions in revenue. lol
The liberal base has been weakened significantly by Brown's win in MA, and Obama will have to give in to Independent conservative voices to get their support back, if he doesn't want to see his congressional majorities & presidency implode.
Obama will end up getting the bank fee/levy proposal passed, although it will be significantly watered down after successful lobbying by Wall Street. But dreamers like you, that are in love with a financial transaction tax to pay for climate change, Haiti relief, wiping Pelosi & Reid's assholes, etc............keep on dreaming!!!
Hugs, kisses, and bitch slaps!
A. Speculator
Though I tend to take a non confrontational approach when attempting to explain why the FTT is a terrible idea, I think I may have to rethink my approach after reading this response. I love this response I could not stop laughing after I read it
I don't believe you should rethink your approach. It doesn't help our cause to be rude with the other side. Crass posts (even if what they say is factually true) simply feed the false stereotype that traders are amoral parasites on society. It's much better to demonstrate the truth: traders are people just like anyone else and don't deserve to be demonized. Being classy helps in doing that.