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

[Stok]

Quote from vicirek:

Pro FTT arguments show complete misunderstanding of basic economics.

My question is if you can legally tax an event where there is no expectation of profit and there is high risk of loss.

There is only exchange of capital property for cash. The net is zero at the moment of transaction.

So what exactly is being taxed?

Capital gains, dividends or income from trading activity is already taxed.

You can be rational with liberal, democrat, socialists who want all your money to fund propaganda to buy votes to keep them in power. That sums up what is going on in the world and the "game" plan for democrats since Woodrow Wilson.

That is the true enemy to the USA and individual and sovereign freedoms.

These people are chronic liars who feed off of emotions for power.

 

[loufah]

Quote from vicirek:

My question is if you can legally tax an event where there is no expectation of profit and there is high risk of loss.

There is only exchange of capital property for cash. The net is zero at the moment of transaction.

The state can tax the sale of a product even when no profit is being made on it. The state can tax transfers of property when no money is being given in exchange.

 

[loufah]

Quote from Stok:

4. Jobs lost are in the 100,000's. Traders, CTAs, money managers, brokers, software providers, accountants, etc.

What's the basis for this claim? If the tax causes volume to drop back to where it was in the 1980's, were there really that many fewer people in the industry back then? If people have to pay 1/4% for each trade - if you look back before decimalization people buying at the ask were paying a half percent or more penalty on each trade - were there hundreds of thousands of fewer people in the industry?

 

[Stok]

Quote from loufah:

What's the basis for this claim? If the tax causes volume to drop back to where it was in the 1980's, were there really that many fewer people in the industry back then? If people have to pay 1/4% for each trade - if you look back before decimalization people buying at the ask were paying a half percent or more penalty on each trade - were there hundreds of thousands of fewer people in the industry?

Seriously? Volume has little to do with it compared to the FTT. If you can't even afford to make a trade based on a tax, then it doesn't matter what the volume is. And the financial industry has grown how much since 1980's? Probably 10-15x. The lower volume and liquidity will exaggerate the problem!

I am an exempt CTA, and this tax would put me out of business, and I do not day trade. I trade 7 markets, with about 20 trades a month, holding an average a 2-3 days (classify me as a swing trader). I know MANY traders, CTA's, & money managers that this tax would basically close the doors, and this is just in the Dallas/FTW area. Let see...I use a prime broker, 3 charting services, 2 data feeds, and 1 CPA that would get no more business from me.

Quit acting like this tiny winy tax is no big deal.

 

[Stok]

And lets not forget the money we deploy to trade, whether ours and/or clients, is money that has already BEEN taxed, and any profits will BE taxed, and federal agencies TAXES (we already pay a FTT now!) are built into our commissions (SPIC, CFTC, SEC, etc).

 

[TheMan]

Quote from loufah:

What's the basis for this claim? If the tax causes volume to drop back to where it was in the 1980's, were there really that many fewer people in the industry back then? If people have to pay 1/4% for each trade - if you look back before decimalization people buying at the ask were paying a half percent or more penalty on each trade - were there hundreds of thousands of fewer people in the industry?

WOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


as it is proposed as of now at 50 cents per $100 traded ( for stocks)


apple at 700 per share

a trader wants to buy 1000 shares and then sell that 1000 shares.

(700 x 1000) x .005 = $3,500 per side

7k round trip

at a 7k cost a trader would need apple to make a 1% move of 7 points in order to just break even. ( not including cap gains taxes or commissions)

That is a lot different than paying a 1/16th spread cost.


NAH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

No big deal at all.

 

[zdreg]

Quote from loufah:

The state can tax the sale of a product even when no profit is being made on it. The state can tax transfers of property when no money is being given in exchange.

of course + the government can tax profits which are actual losses after being adjusted for inflation. no wonder the US is going down the drain.


it is a bloody shame that i have to post this again for the mathematically clueless.


"Semi- active trader does 20 trades/day. typical trade is 500 shares at $20. assume u are flat at the end of the day. Assume a .001 tax rate
capital $50,000 maximum exposure is $200,000
500 x $20 x10(#trades subject to tax) = $100,000 x .001 = $100
$100 x 250 = $25000 = 50% hit to capital.
same calculation with a .002 rate =$50,000 = 100% hit to capital.

.001 is at the lower end of the suggested rate for stock traders. .003 is more typical. i am sure that posters are capable of doing the calculations at .003."

 

[TheMan]

Quote from zdreg:

i am sure that posters are capable of doing the calculations at .003."

Are you really sure about that?

 

[zdreg]

Quote from TheMan:

Are you really sure about that?

unless you are trying to get rid of them, don't bet your wife/ girlfriend that posters on this thread can do the the calculations.

 

[vicirek]

Quote from zdreg:


$100 x 250 = $25000 = 50% hit to capital.
same calculation with a .002 rate =$50,000 = 100% hit to capital.

Key word is Capital. It is not a hit. It is removal of Capital from the economy.

It is transfer of money from economically active people to incompetent and corrupt bureaucrats.