House Democrats reintroducing financial transaction tax with AOC as a co-sponsor

[canoe]

So if you're trading futures, this tax bill would still apply to you ? That would make virtually ALL EMINI trading untradeable. Nobody is going to buy 1 ES contract and be 3 points in the hole immediately ($140).

The bill states stocks, bonds, and derivatives. Am I missing something ? IF the do this, they will eliminate hundreds of thousands of jobs, eliminate speculation in the US markets, and KILL all volatility.

Hope it never happens !

no, you aren't missing anything.

and actually it would increase volatility and widen spreads, since there would be so little liquidity.

 

[schweiz]

So if you're trading futures, this tax bill would still apply to you ? That would make virtually ALL EMINI trading untradeable. Nobody is going to buy 1 ES contract and be 3 points in the hole immediately ($140).

The bill states stocks, bonds, and derivatives. Am I missing something ? IF the do this, they will eliminate hundreds of thousands of jobs, eliminate speculation in the US markets, and KILL all volatility.

Hope it never happens !

In Europe they speak again about that tax too (december 2018). Transactions on shares and bonds would be taxed at 0.1%, and derivative products at 0.01%. The FTT would have to be paid if at least one of the parties is based in the EU. That was the latest info on the level of taxation. So it would mean $14 for the ES mini, not $140.
Belgium and Slovakia are blocking at this moment the application of the tax.

https://www.cnbc.com/2019/03/05/bus...al-transaction-tax-proposed-by-democrats.html

The 0.1% tax would be for securities. Futures are no securities but derivatives I think, or am I wrong?

 

[murray t turtle]

if this passes, which seems likelier by the day, i'd have to imagine more and more US traders would give up citizenship and move to a country like, say the UK.

even if as UK residents they'd still have to pay the FTT for US stocks/futures, they could trade foreign stocks/futures and forex with no FTT.

i mean, a 0.1% rate is basically the death of retail trading, period.

to give some perspective, trading just ONE ES contract would incur as tax of around $140.

%%
NOT likely to pass US Senate @ all or pass a Pres Veto @ all.

 

[schweiz]

https://www.difc.ae/

If this bill passes these people should make a move and expand their business. They are eager for new business and have the (almost unlimited) finances to become the new Wall Street. Multinationals could open an office (or even their main headquarters) in Dubai and manage from there their finances.
Just like they did in the past to pay less taxes (going thru the Netherlands, Ireland, Bermuda, Cayman, Bahamas or other fiscaly attractive places).

https://www.taxjustice.net/2014/11/10/netherlands-worlds-largest-source-fdi/
http://www.royalgazette.com/interna...0190228/us-multinationals-25bn-bermuda-profit

 

[ajacobson]

Illinois lawmakers make case for financial transactions tax

https://www.ilnews.org/news/economy...b5NLEpHTKqRSAGm6bGf4wQaq47Y7vhf1bX4pRiFrv1uMk

 

[schweiz]

Illinois lawmakers make case for financial transactions tax

https://www.ilnews.org/news/economy...b5NLEpHTKqRSAGm6bGf4wQaq47Y7vhf1bX4pRiFrv1uMk

This is the best part:
"It would have been difficult for me to go to the state legislature and say, 'You know what, I'm going to move and I gotta take 6,000 traders with me and disrupt their families.' That's not the case anymore," Chicago Mercantile Exchange president Terry Duffy said last year, referring to CME's transition to online trading. "We sold our data center. We sold everything we have in agreement with that data center. They own 22 other data centers in the United States. They could move us into any one of them."


If this FTT taxes gets real I move to forex. No problemo.
I explained already before that physical location has no importance. They can even move to Dubai.

 

[matthewyoung]

I bet the Gulf States would then take over the US stockmarkets. They have the money and are looking for new economical activities once the oil is finished. The financial center would move to Dubai, Kuwait, UAE.
And the economical damage will stay in the US.

In Belgium exist an exchange fee and since 2016 a speculation tax. Since the introduction of the speculation tax, paid stock exchange taxes fell by 55%. The two taxes together fell 29% short of the stock exchange tax only in the last year.
So raising taxes or introducing new taxes diminished the total amount of taxes collected. Like predicted (Laffer curb).

Anders Borg, Sweden's finance minister, has told that a European financial transaction tax won't work, citing his countries own experiment with the tax.

When Sweden began taxing financial transactions in the 1980s, "between 90%-99% of traders in bonds, equities and derivatives moved out of Stockholm to London," Borg said.
"The impact was basically that we did not get any tax revenue. It brought in very little tax money while moving most of the businesses outside of Sweden.
"We abandoned [the tax] because it was a very, very bad functioning tax."
Sweden implemented its tax in 1984. It was a 0.5% tax on a purchase or sale of an equity security. It was doubled in 1986 and subsequently lowered. In 1991 the tax was abolished following disappointing revenues.

Informative, good post. Unfortunately the tax is more of a political statement than a tax generating thing

 

[schweiz]

Informative, good post. Unfortunately the tax is more of a political statement than a tax generating thing

I have already seen small tax laws that were introduced. Small taxes are easier to pass into laws, less resistance because of the low taxation level. Once introduced they can raise the tax without anybody noticing it. And then it becomes what it was meant for: a tax generating lots of money.

Same story for "temporary" taxes. In no time they become "permanent" taxes.

 

[CoolTrader]

See what Larry Summers said at the end of the video. The last question asked by the reporter is about new taxes. I give him a thumb up.