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

[tandh]

Every tax starts off as very small and the feeling that no one will notice it anyway, but wow, look at all the revenue the government will get to waste. However, once the tax is created, it can simply be raised in the future.

Look, if the public sector benefits by having more money added to it, and suffers by having money decreased from it, then the private sector is the exact same way. If you take one billion out of the private sector and stick it into the public sector, then you shrink the private sector and grow the public sector. If you do the reverse, then you grow the private and shrink the public.

What's good for the economy is growing the private, not the public sector. The private sector provides things we want, the public sector provides things we are forced to take.

 

[debitspread]

Every tax starts off as very small and the feeling that no one will notice it anyway, but wow, look at all the revenue the government will get to waste. However, once the tax is created, it can simply be raised in the future.

https://en.wikipedia.org/wiki/Taxation_history_of_the_United_States
Congress enacted an income tax in October 1913 as part of the Revenue Act of 1913, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. By 1918, the top rate of the income tax was increased to 77%...

 

[sprstpd]

Already tried and failed:

https://en.wikipedia.org/wiki/Swedish_financial_transaction_tax

 

[Redneck]

What do you think of this idea?

Don't like it - I already pay plenty of federal and franchise taxes.., along with the tax I pay on everything else

I'm fed up with the idiotic incompetency of our government - not my desire to bail / assist in bailing - anyone out


I managed my budget..., like they do the country's - I'd be incarcerated


RN

 

[tandh]

I don't know off hand, but also I believe the original income tax referred only to passive income, such as dividends but did not include earned income such as wages.

It's just the same game over and over again. Funny thing, the other day while I was at Mall of America I got a receipt from the Nickelodeon Universe. There was a list of over 9 taxes that were charged to my ticket price. I kid you not.

 

[vicirek]

While there are plenty of bright spots in the economy, there is reason to believe growth will once again slow down. One way to enlarge their sense of the possible: consider a source of revenue they have so far largely ignored – a small tax on sales of stocks, bonds, and complex financial instruments.

How small? Really, really small. A bill co-introduced by Sen. Tom Harkin, D-Iowa, and Rep. Peter DeFazio, D-Ore., calls for a tax of 0.03 percent – that's 30 cents per $1,000. Yet even at that exceedingly modest level, a Wall Street speculation tax (also known as a financial transaction tax or FTT) would generate more than $350 billion over the coming decade, according to a non-partisan analysis of similar legislation introduced in 2012.

What do you think of this idea?

There is already tax on capital gains and income from capital property as well as trading as income. Therefore FTT is double taxation. FTT is tax on free flow of capital which means it is fundamentally flawed on economic grounds not to mention that negative outcome will be taxed as well meaning that risk taking will be taxed. This is not trivial since risk taking and free flow of capital ensured accelerated economic growth of Western World. All major market participants (banks, hedge funds) will be exempt from this tax. Everybody else will speculate outside tax jurisdiction or move to markets that are not affected. Financial tax on every transaction as a fraction of exchanged capital is never small. It looks small the way it is presented because of faulty maths. US markets currently thrive on trading directly or indirectly government deficits since all real economy has been exported abroad. Here is an idea: instead of taxing middleman just go and tax at the source: the Government.

 

[sculptor66]

The worst thing about the transaction tax is not that it's not justified from a taxpayers standpoint.

The worst thing is that it would make the markets that functioned well during the financial crisis more like the ones which didn't function as they should. Think about it: The markets largely 'at fault' for the financial crisis were the real estate market and the markets for OTC collateralized debt and OTC debt derivatives.

One important characteristic of those markets is that they have relatively low liquidity and transaction frequency. That made them so inefficient and created such huge mispricings in the first place.

If you understand this, you also understand that a transaction tax would not prevent a future market crisis but in fact would increase the risk for it.

 

[JTrades]

Ignorant lefty tentacles.

Said this before. Here it is again:

FTTs violate the general public-finance principle that it is inefficient to tax intermediate factors of production.

It's analogous to taxing a baker every time a piece of dough is put in or taken out of the oven. This includes not only perfectly baked bread, but dud loafs too.

 

[Green Hand]

Do you even trade equities? Do you daytrade?

Is that relevant?

 

[zdreg]

While there are plenty of bright spots in the economy, there is reason to believe growth will once again slow down. One way to enlarge their sense of the possible: consider a source of revenue they have so far largely ignored – a small tax on sales of stocks, bonds, and complex financial instruments.

How small? Really, really small. A bill co-introduced by Sen. Tom Harkin, D-Iowa, and Rep. Peter DeFazio, D-Ore., calls for a tax of 0.03 percent – that's 30 cents per $1,000. Yet even at that exceedingly modest level, a Wall Street speculation tax (also known as a financial transaction tax or FTT) would generate more than $350 billion over the coming decade, according to a non-partisan analysis of similar legislation introduced in 2012.

What do you think of this idea?

calculate the numbers. there were 15,000 posts on this subject. people still don't know that a tax of .001 or 10 cents per $1000 would put day traders and hft traders out of business.