Mark Cuban pushes for 20 cents per share tax on every roundtrip.

S

seasideheights

Tax the Hell Out of Wall Street; Give it to Main Street
Sep 30th 2008 9:02AM

Tax every single share of stock that is bought and sold 10 cents per transaction. One dime. If you buy a share of stock, your brokerage pays a 10c tax. If you sell a share, your brokerage pays a 10c tax. 1 share, 100 million shares. Its 10 cents per share.

Of course the tax will be paid for by those of us who are buying and selling stocks. So what. Here is the reality. If you are a true investor. Someone who wants to own a share of stock in a company you believe in, then its an amount that is not going to impact your investment decision making process.

If you are a professional trader or an institutional trader that trades continuously, then it may impact your decision making process, but only to the point of reducing your returns by a minimal amount. Its not going to change your inclination to trade. If you make 9.9pct instead of 10pct, you aren’t going to stop trading.


http://blogmaverick.com/2008/09/30/how-to-tax-wall-street-give-it-to-main-street/
 
21st Century version of "The Stamp Act"?

Wasn't that the "straw which broke the camel's back" and lead to the Revolutionary War?
 
If I got paid 20 cents every time Cuban opened his mouth and said something stupid or irrelevant, I'd have an extra income.
 
Quote from seasideheights:

Tax the Hell Out of Wall Street; Give it to Main Street
Sep 30th 2008 9:02AM
If you are a professional trader or an institutional trader that trades continuously, then it may impact your decision making process, but only to the point of reducing your returns by a minimal amount. Its not going to change your inclination to trade. If you make 9.9pct instead of 10pct, you aren’t going to stop trading.
More...

I'd love to see the math behind Cuban's assessment that a "professional trader or an institutional trader" would lose 0.1% in returns for the year. Assume the case of a portfolio that turns over once a year and purchases stocks with an average price of $20. Let's use Cuban's stated return of 10% after commissions. This equates to profits of $2.00 per share. Take away $0.20, leaving $1.80. This investor makes 9.0%, not Cuban's stated 9.9% - a huge difference.

Now, take into account that the turnover rate in my example is actually lower than that of the *average managed domestic stock mutual fund - and that traders typically turn over their portfolios far more than mutual funds. Additionally, consider that some very successful traders focus upon the small cap sector, which is generally comprised of companies having a low share price. The returns of these traders would be devastated, contrary to Cuban's assertions.

Conclusion:
Cuban is either:
A) a devastating combination of 'liar' and 'moron'
B) somebody who would like to see a lot of traders forced out of the profession
C) all of the above [/B][/QUOTE]

*average turnover ratio = 130%
http://www.bankrate.com/brm/news/investing/20020306a.asp
 
brilliant idea ... almost on par with banning shorts to keep the markets from ... aw hell ... crumbling. maybe that isn't the best example.

read any of the comments to his idea? sounds like most would gladly drink the kool-aid for him. his responses to the detracting comments are priceless. I think I hear MENSA calling him now. nice fuzzy math too.

ugh.
 
I suggest to tax those people who ripped of main street during the Dot-com boom.

It is Cuban who ripped of people of
main street $5.9 billion by its worthless Broadcast.com.

Mark Cuban, what a joke.

Quote from BlindLemonBoosh:

I'd love to see the math behind Cuban's assessment that a "professional trader or an institutional trader" would lose 0.1% in returns for the year. Assume the case of a portfolio that turns over once a year and purchases stocks with an average price of $20. Let's use Cuban's stated return of 10% after commissions. This equates to profits of $2.00 per share. Take away $0.20, leaving $1.80. This investor makes 9.0%, not Cuban's stated 9.9% - a huge difference.

Now, take into account that the turnover rate in my example is actually lower than that of the *average managed domestic stock mutual fund - and that traders typically turn over their portfolios far more than mutual funds. Additionally, consider that some very successful traders focus upon the small cap sector, which is generally comprised of companies having a low share price. The returns of these traders would be devastated, contrary to Cuban's assertions.

Conclusion:
Cuban is either:
A) a devastating combination of 'liar' and 'moron'
B) somebody who would like to see a lot of traders forced out of the profession
C) all of the above
More...

*average turnover ratio = 130%
http://www.bankrate.com/brm/news/investing/20020306a.asp [/B][/QUOTE]
 
Quote from BlindLemonBoosh:
Conclusion:
Cuban is either:
A) a devastating combination of 'liar' and 'moron'
B) somebody who would like to see a lot of traders forced out of the profession
C) all of the above
More...

In one of Cuban's later comments on his blog, he indirectly admits to 'B': "Of course every tax always reaches the consumer. But this separates the investors from the traders. If you put your money in a fund that trades a lot, it will hit you. If you put your money in a fund that actually invests in companies, it would barely impact you"

And if you are an equities trader?...

Cuban's Ideology On 'Investing':
"I'm not doing this for some greater good - I want to make more money. I love to fuck with people, and I love finding ways to make more money." - Mark Cuban
http://www.wired.com/wired/archive/13.04/cuban_pr.html

Mark, why the antipathy towards traders who want 'to make more money'?
 
Comment by Honest Capitalist — September 30, 2008 @ 8:46 pm

I forgot to add - there’s a moral issue here too. One should not destroy the livelihood of a group of law-abiding people without a damned good reason. Daytraders and scalpers did not cause excessive leverage in banks and investment-banks, they did not cause people to speculate recklessly on real estate they couldn’t afford, they did not drive house prices above the price Joe Sixpack could safely pay, they did not inflate serial asset price bubbles by recklessly loose monetary policy. All they did was collapse stock bid-ask spreads from 1/4 of a dollar to 1 cent over 10 years, reducing transactions costs on stocks by a factor of up to 25-fold, thus benefiting investors enormously. Many short-term traders have been warning for several years about excessive speculation in real estate and credit - we knew about it because we saw one asset-price bubble before, the ridiculous mania and overpricing of the dot.com boom, from which you Mark profited handsomely (unlike the people who bought your company).

So for providing a service to investors, earning an honest living, and warning about the current disaster 1-3 years beforehand out of pure altruism, why on earth should we be driven out of business by a bunch of limousine-liberal billionaires who can just sit back and collect their T-bill interest without having to earn a living or risk everything in the markets daily? Who are politicians or SEc officials, being paid their salaries from the taxes we pay, to outlaw our work or make it economically prohibitive through knee-jerk punitive legislation? Did you think you might be putting some guy out on the street with your proposal, before posting uup? No, in typical blog fashion an idea popped into your head, you thought about it for a short while, and posted it without even considering if you were educated enough about the subject to be fully aware of the consequences. I’m very disappointed that someone like you could advocate a measure that will ruin lives, and not even mention that as a possibility, let alone give a morally defensible justification.

basically the parts of the equation a politician doesnt want to hear about but the service a trader provides is invaluable. of course us traders would adapt (nature of the business) if not exempt, offshore we will go. how would that benefit the US of A.
 
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