Quote from zdreg:
you are posting nonsense.
"after 10000+ posts we still have mathematically clueless posters.
no one has recommended .001% ftt which is equal to .00001 of the transaction."
furthermore it has been show numerous time that .001tax, which is at the lower end of the suggested tax, would put active traders out of business. that is contrary to that repeated dribble that"it would not be the death knell of traders."
It is a pity you lack the upbringing to have a civil discussion, but never mind, we will have to overlook that I suppose.
First off, your quote above that I have italicised. The article very clearly states, and
you quoted it earlier, "The government will levy a
0.001 percent tax on the value of Kospi 200 futures contracts and a 0.01 percent tax on the premiums for Kospi 200 option contracts starting Jan. 1, 2016, the Ministry of Strategy and Finance said in a statement."
So it is clearly misleading for you to state that no one has recommended 0.001% tax.
In case you are mathematically clueless, let's work an example of what this means. I will use the ES as a proxy, as more people here can relate to it.
The ES is worth $50 a point, so if the S&P is at 1,400 points, it is worth $70,000 and 0.001% of the contract is 70 cents. Now 1 tick of the ES is $12.50, ie. $50 a point. Perhaps you might think it necessary to stop trading if your cost went up by 70 cents per contract per side, but I assure you not many will follow you. People pay $9.99 + $0.75 to TOS per options contract when IB has $0.85.
Thailand has a 7% VAT on Stock Exchange Commissions, so I pay 7% of 0.15% = 0.01% roughly on my trades. Now the foreign funds maybe pay a fraction of the commission I pay as a retail trader, but 7% of 0.03% is still 0.0021% so go figure. That does not deter them from trading on the SET (
http://www.set.or.th/en/index.html ). Click on the link and look at the lower right of the page and you will see that today about half the trading value was "Foreign". Even foreign retail like me gets classified there, but the volume is obviously foreign funds driven. And yes, it only applies to end buyer and end seller so there is NO cascading or multiplier effect.
Now before you conclude that I support the tax, I think the many posts I have made here show otherwise. I very clearly stated in my earlier post that if the tax is levied on end buyer and end seller, it would not be the death knell. My big fear is that any such tax will be levied on every step of the process. Why should it? Because people can.
A short while back some people posted material about Goldman Sachs witholding taxes for the French FTT. There was a discussion whether only nett offset positions would be affected and if I recall GS said no, that would be operationally difficult. What crap, and yet nobody said anything. So all it takes for FTT to be levied every step of the way is for some people to say, like GS did in this case, that it would be too difficult to identify end buyer and end seller.
On the other side of this debate, there are also intelligent reasonable people who are capable of doing the arithmetic. If we are intellectually dishonest in our approach to this debate, we only risk alienating them and having them think us a bunch of no good crooks who would do a Madoff given half the chance. Better to be honest and get the support of the reasonable and the reasoned.
This is also why I do not advocate name calling when we refer to those who support the FTT. You may think that you can bully and intimidate your way around here, but I assure you it will not serve to convince anyone who supports the FTT to switch sides and join you.
