New Jersey and New York are thinking of taxing financial transactions

[listedguru]

Here is some more color (confusion, lol) I dug up on the the bill. In the original bloomberg article I linked to on yahoo:

https://finance.yahoo.com/news/murphy-very-seriously-mulling-jersey-181149075.html

It has this quote from Larry Tabb who has been involved in the industry a long time:

"If implemented, the tax could generate billions of dollars, said Larry Tabb, head of market structure research for Bloomberg Intelligence. Costs would be passed on to investors and would probably reduce trading and force exchanges to relocate over time."

Now I come across Larry's twitter feed where there is a discussion about the amount of the tax and Larry seems to have corrected his thinking on the amount of the tax:

https://twitter.com/x/status/1300531000414482433

Read all the discussion below Larry's original tweet. Larry says that he thinks the tax would only raise maybe 40m across the entire industry based on $0.0025/transaction.

Whatever the case may be I think the bill is poorly written so hopefully we can get some more clarification on this issue. I just reread the bill again and it mentions the 0.0025 amount per transaction so I would assume that's correct, lol. If that's the case and it would only raise 40m or so per year that seems kind of stupid as that will do nothing to fill a budget hole in the billions.

I guess therein lies the problem - once something like this gets on the books it starts out small and the sky is the limit. You gotta believe the nyse, nasdaq and cme will be fighting this and would probably move out if need be?

-Guru

 

[KCalhoun]

You KNOW they'll lowball the first ftt bill to get it passed, then jack it up over time, right? Fcking tax parasites

 

[newwurldmn]

Yeah cutting spending for things like police and first responders is wildly popular with people who don’t actually pay any taxes

no real politician wants to defund the police. It’s a rallying cry like “Mexico will pay for the wall” or “Lock her up”

but corporate welfare while cutting a safety net is the scam of the century! Maybe after the six thousand dollar toilet seat.

 

[elt894]

It has this quote from Larry Tabb who has been involved in the industry a long time:

"If implemented, the tax could generate billions of dollars, said Larry Tabb, head of market structure research for Bloomberg Intelligence. Costs would be passed on to investors and would probably reduce trading and force exchanges to relocate over time."

Now I come across Larry's twitter feed where there is a discussion about the amount of the tax and Larry seems to have corrected his thinking on the amount of the tax:

It's surprising someone like Tabb is all over the place on this...confusing shares vs transactions and 0.25 cents vs 25 cents (a shockingly common confusion).

$40 million is more in line with what I was thinking. I was skeptical there were actually billions of transactions per day. Nasdaq issued stocks do about 25 million transactions per day across all exchanges. Derivatives are bigger in notional but probably not in number of transactions. I'd be surprised if there are more than low hundreds of millions of transactions per day.

Hardly seems worth the implementation headaches, but it's also probably low enough to not drive out the data centers. If it were a federal tax I'd be more concerned about starting down a slippery slope, but at a state level they can't afford to go too much higher. The New Jersey governor was at Goldman for 23 years and rose to their management committee. Surely he's aware data centers can be moved.

 

[listedguru]

It's surprising someone like Tabb is all over the place on this...confusing shares vs transactions and 0.25 cents vs 25 cents (a shockingly common confusion).

$40 million is more in line with what I was thinking. I was skeptical there were actually billions of transactions per day. Nasdaq issued stocks do about 25 million transactions per day across all exchanges. Derivatives are bigger in notional but probably not in number of transactions. I'd be surprised if there are more than low hundreds of millions of transactions per day.

Hardly seems worth the implementation headaches, but it's also probably low enough to not drive out the data centers. If it were a federal tax I'd be more concerned about starting down a slippery slope, but at a state level they can't afford to go too much higher. The New Jersey governor was at Goldman for 23 years and rose to their management committee. Surely he's aware data centers can be moved.

This is taken right from the tax bill:

"There are reportedly billions of financial transactions processed daily, and many of those are processed through electronic infrastructure located in New Jersey." Surely they are not billions of transactions processed daily here in the us (let alone NJ) as you alluded to above.

I wonder if the author of the bill is confusing shares traded with financial transactions? I surely hope this bill doesn't turn out to be something other than what it appears to be. I guess worse case I would think the nyse, nasdaq and others who have servers in Jersey would in fact move them if the bill was going to be disruptive (if it's even implemented at all).

 

[bone]

I met Jeffrey Sprecher in the 1990's and have followed ICE closely ever since. IMO it would be a grave mistake for anyone to think that they could intimidate him or that somehow NYSE would just sit there and allow themselves to be a piggy bank for a badly managed and fiscally irresponsible State(s). ICE owns and operates twelve regulated electronic exchanges, their headquarters is in Atlanta, and they have offices and IT centers all over the world.

ICE Data Services has servers in major cities across the world. ICE teamed up with Microsoft and Boston Consulting Group to form BAKKT, which uses cloud computing to create a digital ecosystem for digital currencies and for warehousing all sorts of merchant and consumer digital assets.

ICE is also in the mortgage trading and registration business.

Point being, ICE has plenty of ECN options for hosting NYSE trade processing.

 

[Cuddles]

Dear Democrats,
How about for ONCE you CUT SPENDING instead of creating more taxes!
You can start with the obscenely large pensions for public workers.

your message should be directed at the party of corporate welfare in power printing trillions

 

[destriero]

Here is some more color (confusion, lol) I dug up on the the bill. In the original bloomberg article I linked to on yahoo:

https://finance.yahoo.com/news/murphy-very-seriously-mulling-jersey-181149075.html

It has this quote from Larry Tabb who has been involved in the industry a long time:

"If implemented, the tax could generate billions of dollars, said Larry Tabb, head of market structure research for Bloomberg Intelligence. Costs would be passed on to investors and would probably reduce trading and force exchanges to relocate over time."

Now I come across Larry's twitter feed where there is a discussion about the amount of the tax and Larry seems to have corrected his thinking on the amount of the tax:

https://twitter.com/x/status/1300531000414482433

Read all the discussion below Larry's original tweet. Larry says that he thinks the tax would only raise maybe 40m across the entire industry based on $0.0025/transaction.

Whatever the case may be I think the bill is poorly written so hopefully we can get some more clarification on this issue. I just reread the bill again and it mentions the 0.0025 amount per transaction so I would assume that's correct, lol. If that's the case and it would only raise 40m or so per year that seems kind of stupid as that will do nothing to fill a budget hole in the billions.

I guess therein lies the problem - once something like this gets on the books it starts out small and the sky is the limit. You gotta believe the nyse, nasdaq and cme will be fighting this and would probably move out if need be?

-Guru

Zero impact.

 

[Arnie]

EU lawmakers in the European Parliament’s budget committee backed a bloc-wide charge on unrecycled plastics and called for a timetable for introducing a digital tax and financial transaction tax, among others, to help fund the EU budget.

What is a Financial Transaction Tax? How Much Could It Cost You?

Murphy’s Wall Street Tax Plan Has Pros and Cons

 

[Arnie]

Human Capital: Elizabeth Warren, Treasury Secretary?

Welcome back to Human Capital! After the Democratic National Convention last week— and former Vice President Joe Biden’s official nomination as the party’s candidate — buzz is also swirling around Sen. Elizabeth Warren, D-Mass., and what role she may play in a Biden administration, if there is one.

Given her financial regulatory acumen, would Warren be picked as Treasury secretary? How about director of the Consumer Financial Protection Bureau — the controversial agency she helped create? Also, what would the regulatory environment look like under a Biden administration?

Brian Knight, senior research fellow and director of Innovation and Governance at the Mercatus Center at George Mason University, weighs in with Human Capital on whether Warren would even want those posts. He points out: If Biden wins, the Senate flips to Democratic control and the House stays that way, Warren “may have a lot more power in dealing with financial issues by staying in the Senate.”

Keep scrolling to see more of Knight’s comments on Warren’s potential new job prospects as well as views on Biden’s regulatory stance from Aaron Cutler at Hogan Lovells.

During her speech Aug. 19 at the Democratic National Convention, Warren strayed from her usual “crackdown on Wall Street” message, focusing instead on child care and praising Biden’s plans to increase Social Security benefits, cancel millions in student loan debt and “make bankruptcy laws work for families.”

As to potential Biden administration posts, secretary of the Treasury “makes the most sense,” Knight opines. While not a primary regulator, in terms of regulatory policy Treasury “does a lot of work” in that area along with “facilitating the administration’s view and interacting with Congress.”

Treasury secretary would be the “capstone, most prestigious position” for Warren, according to Knight.

As to Biden’s regulatory focus, “financial regulation will be one of the targeted sectors for a robust increase,” said Aaron Cutler, a partner in the Government Relations and Public Affairs practice at the global law firm Hogan Lovells.

The CFPB under Biden would “become very active again,” with “many new regulations and increased enforcement activity” likely on tap, Cutler said. There’d also be “an uptick” in regulatory activity at the SEC.

Changes in tax policy, namely a financial transaction tax, “could be put on the table and implemented as a revenue raiser,” Cutler says. Plus, the corporate tax rate is likely to be raised “especially if Democrats were to win the Senate” along with a Biden victory.

“As part of a tax increase, it is easy to see Democrats targeting individuals making over $500,000 year, which would particularly impact those in the financial services sector in New York.”

Investigations by regulators as well as lawmakers would also spike, Cutler adds, as Democrats pivot their eyes from the Trump administration back to “their core policy issues” — like Wall Street and private equity.