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

Some more info:

UPDATE: Obama Administration Wants CFTC To Charge New Derivatives Fees:

http://www.bloomberg.com/news/2011-...ls-for-6-5-billion-5-000-staff-in-budget.html

Both the user fee proposal and the funding increase would have to be approved by Congress.

Allowing the agency to charge user fees "brings the CFTC into line with all other federal financial regulators," the administration said in the budget document.

Republicans said the idea is a backdoor tax increase.

The fees are "an off-budget accounting gimmick that will hide the true cost and scope of the federal government," Rep. Scott Garrett (R., N.J.) said in a statement.

CFTC Commissioner Scott O'Malia, a Republican, said he was opposed to a "$117 million transaction tax."

"This is a disingenuous effort that only puts us further behind the requested funding level and will continue to add to the federal deficit," O'Malia said.



It's interesting that Scott O'Malia (R) referred to this as a "$117 million transaction tax."

-Guru
 
"Representative Scott Garrett, a Republican from New Jersey, said the user fee proposal is “an off-budget accounting gimmick that will hide the true cost and scope of the federal government.”

why don't you people write him a letter thanking him for his remark.
include in the letter a detailed example how a FTT as small as .001 or 1/10% would put you out of business
 
Quote from listedguru:

Here's a little more info on the user fee Obama is proposing on the derivatives industry:

User Fees:

"For the CFTC, the budget would jump to $308 million -- an increase of more than 80 percent over Congress’s 2010 allocation. Obama proposed that the agency introduce user fees on the derivatives industry to raise as much as $117 million in the 2012 fiscal year and $588 million through 2016."

"House Republicans, who took power after the November elections, have pointed specifically to the CFTC’s derivatives rules as being too onerous and, in some cases, without merit."

“The commission is currently headed down a path that extends well beyond the statutory requirements of Dodd-Frank and is attempting, at the request of no one, to micro-manage individual risk across all industries and sectors,” Representative Michael Conaway of Texas, a House Agriculture panel subcommittee chairman, said last week.

Representative Scott Garrett, a Republican from New Jersey, said the user fee proposal is “an off-budget accounting gimmick that will hide the true cost and scope of the federal government.”

http://www.bloomberg.com/news/2011-...ls-for-6-5-billion-5-000-staff-in-budget.html

-Guru
More...




At least we know this user fee/transaction tax is a non-starter for Republicans in the House. Thank goodness they won the House majority last Nov.
I'm now very curious to see what the official U.S. position is on the global transaction tax issue. I will be watching closely for developments at the G-20, as I'm sure everyone else will.




I am a bit concerned about what the U.S. position will eventually be on the global FTT after reading this.


http://www.google.com/url?sa=t&sour...lMkomH-JS3iVhETEA&sig2=dDXjOavGSS06t4MwBYHRsA
 
I am a bit concerned about what the U.S. position will eventually be on the global FTT after reading this.


http://www.google.com/url?sa=t&sour...lMkomH-JS3iVhETEA&sig2=dDXjOavGSS06t4MwBYHRsA [/B][/QUOT



In Germany, the deal is being sold as a German takeover of the NYSE or as a merger of equals. Any suggestion that the NYSE management team will be in control counters that public stance and could create an obstacle to the deal getting done.


Hopefully, the deal doesn't happen.
 
Quote from rc8222:

I am a bit concerned about what the U.S. position will eventually be on the global FTT after reading this.


http://www.google.com/url?sa=t&sour...lMkomH-JS3iVhETEA&sig2=dDXjOavGSS06t4MwBYHRsA [/QUOT



In Germany, the deal is being sold as a German takeover of the NYSE or as a merger of equals. Any suggestion that the NYSE management team will be in control counters that public stance and could create an obstacle to the deal getting done.


Hopefully, the deal doesn't happen. [/B]
More...

I really hope the deal doesn't get done as well. If it does I really don't think it would change the position of the US when it comes to the FTT. Also I really hope Timmy comes out against the FTT strongly at the G20 meetings later this week and tells them to quit wasting everyone's time.

They updated this piece I posted earlier with a couple more bits of info:

http://www.nasdaq.com/aspx/stock-ma...ion-wants-cftc-to-charge-new-derivatives-fees

"We don't think this is the time to put more fees on market participants who are likely to find their costs will go up in relation to new requirements under the [Dodd-Frank] Act," said Ken Bentsen, executive vice president of public policy at the Securities Industry and Financial Markets Association."

"Futures Industry Association President John Damgard said the plan would hurt futures market efficiency and increase costs to companies seeking to hedge risks."

Also it sounds like it's a given that the Sec fees levied on stocks are going up next year (possible quite a bit).

"The SEC has for years levied transaction fees, which have been used to partly offset its appropriation from Congress. The Dodd-Frank law requires the SEC, beginning in 2012, to charge enough in fees to fully offset the appropriation."

So according to this the sec has only levied fees that partly cover the appropriaton they receive from Congress but in 2012 those fees must fully offset the appropriation. I wonder what kind of increase were talking here? I think the Obama budget is calling for a 27% increase in sec funding.

-Guru
 
It will be interesting to see what develops with this issue. House Republicans won't approve any additional funding for the CFTC, nor will they allow for user fees to be placed on traders. IMO, the GOP will do everything in their power to prevent the CFTC from being able to regulate derivatives according to the new Dodd-Frank Law. I'm thinking they'll force Obama to take funds already allocated to other programs, and use them to provide additional funding to the CFTC. But then again, that may also require Congressional approval. In other words, I think the GOP has Obama by the short hairs on this one. :D
 
As pointed out by others, President Obama has a user fee or FTT in his brand new 2012 budget intended to finance growth at the CFTC.

It's not a budget, it's a political platform for the 2012 presidential re-election. The Republican-controlled House will block the tax increases and new revenue plans geared to finance Obama's new health and financial reform. If Republicans can't repeal healthcare and financial regulation, they can starve the regulators from expanding per the controversial Obama bills.

This means the budget is meaningless and just a rallying cry. So don't get worried if you don't like a provision or more, it's unlikely to pass in this current form.
 
CME Group's Duffy Rejects CFTC User Fee Proposal:

http://www.nasdaq.com/aspx/stock-ma...e-groups-duffy-rejects-cftc-user-fee-proposal

Some strong words here from Duffy:

The proposal "could put us at the biggest disadvantage we've ever seen," Duffy told reporters after a hearing in Washington.

Duffy cited the proposed merger of NYSE Euronext and Frankfurt-based Deutsche Boerse to illustrate his point. The combined entity "would have a huge derivatives business based in Europe which would not be subject to any type of user fee transactions," he said.

-Guru
 
Couple of things:

Tomorrow (Thursday) is being called a global day of action for the FTT. It sounds like a bunch of groups are planning protests, etc against the banks and in favor of the FTT. I guess most (maybe all) of these rallies will take place in Europe. This coincides with the upcoming meeting of the G20 finance ministers in Paris on Friday and Saturday. Let's hope Geithner squashes this FTT proposal on the big G20 stage. Anything less would be a major dissapointment.

-Guru
 
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