A really small Wall Street tax can make a really big difference

[Occam]

Many other countries have already been doing so for years, including the UK. It works just fine, with additional taxes put in place for offshore investors to keep the system from being exploited.

It does not "work just fine" in the UK. Due to the stamp duty, UK short-term trading has shifted to CFD's, which are not subject to the stamp duty. It really distorts things and adds an extra layer of complexity that would otherwise be unnecessary.

Ironically, the indirect holding of shares also contributes to income inequality by increasing the distance between shareholders and the CEO's whose pay (or overpay, in some cases) that the investors should care about and police through shareholder voting, which of course doesn't take place if one doesn't directly own the stock.

In the US it would be even worse, because owing to the lobbying system, the largest and best-connected players would inevitably end up being totally exempt. So it is the small-to-medium sized, US-based traders and investors (including pension holders) who would bear the entire burden of the tax.

 

[zdreg]

Day traders? I think you confound with scalpers. Day trading is existing for decades. 30 years ago, you paid at least 1% in 1% out, even much more.
HFT traders? Good news. Let s get these thieves out of business.

CM

Day traders? I think you confound with scalpers. Day trading is existing for decades. 30 years ago, you paid at least 1% in 1% out, even much more.
HFT traders? Good news. Let s get these thieves out of business.

CM

1. it was not a retail business.
2. it was 40 years not 30 years ago that commissions become negotiable.
3. without hft traders spreads would be much wider. hft traders are not thieves. they provide much liquidity which is not available anywhere else. fyi i am not a hft trader.
4.if you have a case that HFT traders are thieves you should attempt to present a compelling case. otherwise you are similar to posters on yahoo finance who when their stocks collapse blame the "evil" short sellers

 

[zdreg]

It does not "work just fine" in the UK. Due to the stamp duty, UK short-term trading has shifted to CFD's, which are not subject to the stamp duty. It really distorts things and adds an extra layer of complexity that would otherwise be unnecessary.

Ironically, the indirect holding of shares also contributes to income inequality by increasing the distance between shareholders and the CEO's whose pay (or overpay, in some cases) that the investors should care about and police through shareholder voting, which of course doesn't take place if one doesn't directly own the stock.

In the US it would be even worse, because owing to the lobbying system, the largest and best-connected players would inevitably end up being totally exempt. So it is the small-to-medium sized, US-based traders and investors (including pension holders) who would bear the entire burden of the tax.

the Cfd is an extra expense because they are created on the bid and ask and take time to put it up. they also are not doable on every stock.

 

[stevegee58]

4.if you have a case that HFT traders are thieves you should attempt to present a compelling case. otherwise you are similar to posters on yahoo finance who when their stocks collapse blame the "evil" short sellers

Not just yahoo finance posters, also the Chinese government.

 

[Visaria]

You would have to be an utter moron to actively trade shares on the London Stock Exchange.

In UK there are three types of tax you have to pay when trading shares, capital gains tax, income tax and stamp duty. However you need not worry about calculating stamp duty as it is dealt with by your broker when you enter a trade. The current stamp duty you pay on entering a trade is 0.5% so if you buy £10,000 worth of stock you will have to pay £50 straight to the government.

 

[zdreg]

Not just yahoo finance posters, also the Chinese government.

there is no equivalency. the chinese government is much more powerful than yahoo finance posters.

 

[vicirek]

In the US it would be even worse, because owing to the lobbying system, the largest and best-connected players would inevitably end up being totally exempt. So it is the small-to-medium sized, US-based traders and investors (including pension holders) who would bear the entire burden of the tax.

By limiting access to markets by outsiders it becomes much easier to manipulate asset prices and I suspect that not all of Wall Street like free markets because it cost them money in the environment where easy profits come from managing government deficits.

 

[gkishot]

In UK there are three types of tax you have to pay when trading shares, capital gains tax, income tax and stamp duty. However you need not worry about calculating stamp duty as it is dealt with by your broker when you enter a trade. The current stamp duty you pay on entering a trade is 0.5% so if you buy £10,000 worth of stock you will have to pay £50 straight to the government.

Annually this amounts to £50 * 250 trading days = £12,500, which is 25% higher than your initial capital. Let's say the expected annual return is 25%, i.e. £2,500. Stamp duty dwarfs your expected profits.
I am sure people in the UK would rather bet on horses than day trade and pay stamp duty. And the greedy UK gov gets zilch. Simple truth.

 

[Visaria]

only if you buy 10k of shares every day.

Annually this amounts to £50 * 250 trading days = £12,500, which is 25% higher than your initial capital. Let's say the expected annual return is 25%, i.e. £2,500. Stamp duty dwarfs your expected profits.
I am sure people in the UK would rather bet on horses than day trade and pay stamp duty. And the greedy UK gov gets zilch. Simple truth.

 

[zdreg]

Annually this amounts to £50 * 250 trading days = £12,500, which is 25% higher than your initial capital. Let's say the expected annual return is 25%, i.e. £2,500. Stamp duty dwarfs your expected profits.
I am sure people in the UK would rather bet on horses than day trade and pay stamp duty. And the greedy UK gov gets zilch. Simple truth.

it is a waste of time to present proof to a group of mathematical illiterates.