Financial Transaction Tax: Here Comes a Really Bad Idea

sle said:
I am not too worried, especially considering how flexible derivative payoffs could be and how tricky it is to enforce these types of things (e.g. someone can list contingent premium options that would have zero premium at the trade time, swaps on return levels etc). In the worst case, derivative volumes will move off-shore and local stock volumes will decrease (it has happened in Sweden and is in progress in India, for example). My expectation, however, is that the potential proposal will be conservative and the final result will have plenty of loopholes.
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You're more sanguine than I. Hope you're right. An acquaintance in DC tells me they'd like to close the offshore loophole by taxing US taxpayers on securities transactions wherever they occur. How that would work, I have no idea, but note that the US is one of two countries in the world (the other being Eritrea) that taxes citizens on worldwide income, so if there's a way, I'll count on them going for it.

Make no mistake: There is a hunger on the American left to go after evil "speculators."

Btw, re: AOC's Twitter clout, here's an interesting metric:

https://www.axios.com/ocasio-cortez-dominates-twitter-6a997938-b8a5-4a8b-a895-0a1bcd073fea.html
 
tortoise said:
You're more sanguine than I. Hope you're right. An acquaintance in DC tells me they'd like to close the offshore loophole by taxing US taxpayers on securities transactions wherever they occur. How that would work, I have no idea, but note that the US is one of two countries in the world (the other being Eritrea) that taxes citizens on worldwide income, so if there's a way, I'll count on them going for it.
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Considering the portion of GDP coming from the financial services, it's unlikely they will kill the golden goose, but less sane things have happened before. It would be a bad thing, at the extreme, the financial activity will move offshore completely, of course. On the other hand, I'd give it very low probability - once you're outside the progressive group, the Wall Street money is too important to both sides.

tortoise said:
Make no mistake: There is a hunger on the American left to go after evil "speculators."
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I think you are mistaking a fringe group with extreme views for the "American Left". These days, considering where the division is, the "American Left" is where center used to be some 5-7 years ago.
 
sle said:
I think you are mistaking a fringe group with extreme views for the "American Left". These days, considering where the division is, the "American Left" is where center used to be some 5-7 years ago.
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No I’m really not, and if you’re asserting that the Left in this country has moved toward what was the political center then your perspective is unique among political analysts.

Considering the portion of GDP coming from the financial services, it's unlikely they will kill the golden goose, but less sane things have happened before. It would be a bad thing, at the extreme, the financial activity will move offshore completely, of course. On the other hand, I'd give it very low probability - once you're outside the progressive group, the Wall Street money is too important to both sides.
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As for Wall Street money, if there's an exemption for MMs (which there would have to be, which means, of course, the "tax on Wall Street" would be paid on "Main Street") would "Wall Street" necessarily oppose this?

Not a rhetorical question. Just wondering if there might be something a bit more Machiavellian at work here than one might, at first glance, assume.
 
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tortoise said:
But betting on non-normative events isn’t?
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You are betting on an event with a rather well defined binary outcome. It's not any different from a horse race, sports game or an instance of natural disaster.

tortoise said:
No I’m really not, and if you’re asserting that the Left in this country has moved toward what was the political center then your perspective is unique among political analysts.
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No, I am "asserting" that what used to be center and slightly to the right is now left. The window has shifted, peoples views stayed in place. I used to be right of center (market-driven economically but socially liberal), now I am left of center even though my views have barely changed.
 
sle said:
You are betting on an event with a rather well defined binary outcome. It's not any different from a horse race, sports game or an instance of natural disaster.
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It's different in the sense that the outcome is more susceptible to exogenous events (war, for example). Yes, a meteor could strike a horse race and alter the outcome. But that's quite a bit less likely to occur than, say, war with Iran over the next 20 months.

Natural disaster, of course, is the definition of a non-normative event unless you're looking at probability tables, and even then, look how insurers are getting screwed over the frequency of 100-year storms. In any event, I wouldn't lump that would sports betting.

No, I am "asserting" that what used to be center and slightly to the right is now left. The window has shifted, peoples views stayed in place. I used to be right of center (market-driven economically but socially liberal), now I am left of center even though my views have barely changed.
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Oh, ok. That's sort of my situation, as well. But I wouldn't necessarily characterize that as the center shifting right. The political dynamic is certainly polarized, and that has brought about a degree of realignment. What was once a Rockefeller Republican would now be considered a moderate Democrat. What was once a Yellow Dog Democrat is now called a Republican Deplorable.

So it's kind of a scramble.

What is clear, at the moment, is that moderates don't have the mojo. Look at the Axios link. The political Twitter Titans are Trump and Ocasio-Cortez. They are the twins from social media hell. That's what drives the debate. That's what has begun to shape policy. Not a negotiation. But a contest of muscle.
 
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