Call to Arms - We Must Fight the 0.25% Stock Transaction Tax

[NielsenDK]

Quote from tomahawk:

.025 or .25?

0.25%, it was a typo, now corrected

 

[tomahawk]

Ok, thanks for the correction .

 

[Capablanca]

Quote from AMT4SWA:

WOW....you miss two VERY MAJOR points!!!

1) - Mounting up the troops against a tax on trading is an ABSOLUTE joke, in relation to NOT fighting against the government stealing from taxpayers and destroying the constitutional basis of the country as directed by their globalist masters!!!

2) - There is no illusion to the TRILLIONS that were ripped out of the a$$ of the american taxpayer.....and more to come!!! Ready to do anything about that yet??? :eek:

Nope.....most of you just sit back in your timid and docile state of INACTION as the theft continues! No "call to arms" and no fight....just psychologically DEFEATED thoughts of rationalized acceptance of the horrid immoral activity by our current BROKEN government! I hope you will all ENJOY the the future of what you have just accepted! :eek:

1. Smaller maybe but no joke. As I put it in my analogy a transaction tax on bets made in Vegas would likely turn it back into a desert.

2. Who benefitted first and foremost from all the financial shenanigans of the past couple of decades? Answer: Americans. The house prices of recent years were obscene. 7 fat years. 7 lean years. The bill now is gigantic but so was the partying excess. The current large tab is the natural consequence.

 

[Susannah]

Quote from HiFreekTrader:

Again, cap gains will INCREASE, because frequent traders on average LOSE money, compared to long term investors.

This is just not true. For every buyer, there is a seller. If you lost money, someone else made money. Stocks aren't zero sum, that's true, but look at an example. What you're saying is that if a stock goes up from $10 to $20, and there are 10 shares outstanding, if all people holding the 10 shares bought at $10 and sold at $20, the total cap gains is $100. However, if 9 of the people held from $10 to $20, but one sold at $13 to a trader, that trader lost because at that point the stock decided to wiggle, dipped to $12, and he cut his loss, well, another "investor" bought the stock at $12 and held to $20.

Net capital gains is the *same* when you do the math. It doesn't change.

What does change is the government's revenue from the capital gains (it's higher when short term losing traders are present). In the short term, it goes up, because the winners have to pay taxes on *all* of their gains each year. The losers only get to deduct $3k. Heck, some of the losers won't ever get to deduct all of their losses in their lifetime at that rate (when that occurs, the government has definitely won from there being losers).

 

[listedguru]

Quote from Mr. EB:

I call on the financial stock community blogosphere to come together and fight the 0.25% stock transaction tax. We must call our Congressmen and flood their email boxes to let them know how much of a horrible idea this is.

The pro-tax momentum is increasing as a result of this <a href="http://www.nytimes.com/2009/01/13/opinion/13herbert.html">New York Times Op-Ed</a> last week. If you read the comment section, you will see how many people are scarily supporting it without any regard for the unintended consequences.

Currently it is being considered for the stimulus bill. It was actually in the original TARP bill and was taken out. However now with the Democrats fully in charge and the anti-Wall Street feelings at an all-time high, they don't need the Republican votes to pass it. Note I voted for Obama, so please cool any partisan rhetoric.

If this passes, we all know what will happen. It will drive millions of active investors out of the market as it makes it uneconomic for them to trade. This will lower liquidity and make it more expensive to enter and exit positions for everyone. We all know what it is like to buy and sell an illiquid stock. Imagine that for the whole market. Disastrous.

The added price volatility from the illiquidity will hurt market confidence even more and further the exodus of other investors, which will in turn drive the market even lower. The net tax gain for the Government tax coffers may even be negative as investors stop trading and it lowers any short-term capital gains revenue.

Politicians are in panic desperation mode right now where they are willing to try anything. Let's stop them from pouring gasoline on the raging fire.

UPDATE: Here's a link <a href="https://writerep.house.gov/writerep/welcome.shtml">to contact your Congressman</a>. Here are the <a href="http://www.senate.gov/general/contact_information/senators_cfm.cfm">links</a> to the Senators.

UPDATE2: Larry Summers, head of the Obama economic team, wrote a paper in support of a stock transaction tax in the past. God help us. Here <a href="http://www.springerlink.com/content/p016371m624r6742/">is a link</a> to the synopsis of his paper.

UPDATE3: The large Wall Street firms and mutual funds will ask for exemptions to this tax and likely receive it due to their lobbying power and money. This will leave the brunt of the burden to us, the small investor.

Just wanted to clear up a few things. In the above post you mentioned that this transaction tax is currently being considered for the new stimulus plan - I believe that is incorrect. I have seen nothing that indicates that this is the case. Everything I've read seems to indicate this could come into play further down the road (I read 2010 being mentioned at the earliest). But we must remember that this is just a few journalists and economists pumping the issue at the current time.

Also you point out the paper that Larry Summers wrote 20 some years ago. I would just say that Summers has sinced changed his stance on the transaction tax (so it would seem he's on our side). Let's just hope he has Obama's ear on this issue if it comes down to it...

-Guru

 

[skylr33]

Quote from listedguru:



Also you point out the paper that Larry Summers wrote 20 some years ago. I would just say that Summers has sinced changed his stance on the transaction tax (so it would seem he's on our side). Let's just hope he has Obama's ear on this issue if it comes down to it...

-Guru [/B]

Summers is also one of Obama's top economic advisers, and he has changed his viewpoint on this. Summers firmly opposes a financial transactions tax from being implemented. I think we all need to calm ourselves on this issue, as the odds of something like this passing are very unlikely.

 

[porge]

well let's see now.......cows breaking wind......dems will impose tax of $150.00 per dairy cow, only $75.00 per range cow/per year.....or one time tax?

Now, the stock transaction tax........the guy who started this forum says "i voted for obama" but God help us?????????? No, God help you, maybe, he has already helped me to understand that higher taxes are coming .....and all you can do now is set back and wait.....unless you have a cattle operation for write offs...Ouch! Obama is a promoter of same old stuff........abortion and gay marriage...God blesses neither of those .....where do we sink to from here?