Stock Tax May Reduce Volume 90%, Interactive Brokers CEO Says

"Iowa Senator Tom Harkin and Oregon Representative Peter DeFazio said it is the “most painless way” to fund the government’s deficit and curb speculation"

LOL, most painless for Iowa and Oregon, they have no trading industry to speak of.. it's going to be a little difficult to get this idea past New York, Chicago, San Francisco, etc...

How about we as traders unite behind a Hog Farming Tax? They don't call it Swine Flu for nothing, it breeds in pigs, we can get a lot of votes going on this issue, I kid you not.. it's a tax issue, it's a health care issue.. let's shove Iowa and Oregon off the back edge of the tax-world while we're at it...
 
I don't see how this would curb speculation. If you think oil's going to double from current prices would you mind paying a .25% transaction cost on your oil stock or a .02% tax on the future? I wouldn't.

The only thing that's going to be curbed is high volume, short term trading. From the revenue side this would collapse income from capital gains taxes and other types of taxable income due to decreasing volumes. Dumb dumb dumb...
 
Quote from FerdinandAlx:

I don't see how this would curb speculation. If you think oil's going to double from current prices would you mind paying a .25% transaction cost on your oil stock or a .02% tax on the future? I wouldn't.

The only thing that's going to be curbed is high volume, short term trading. From the revenue side this would collapse income from capital gains taxes and other types of taxable income due to decreasing volumes. Dumb dumb dumb...
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Think about what will happen. If I go away with my 10 million shares a month and much bigger fish go away as well you don't get to buy oil with a penny spread. Who knows what spreads will be. All I know is that if this went into effect to all parties without exemption volume would move to almost nothing overnight. Cooler heads will prevail here.
 
Is the tax only on profitable trades or all trades?

Either way you'll see people trying tax arbitrage strategies - putting the losing end of the trade in the US, while profiting offshore.

Mind you they already do that with most trades with the bigger companies...
 
Quote from flytiger:

It's populist kickback for all the graft that was allowed to happen. I think cooler heads will prevail, but there will be some other onerous thing rear its ugly head.

They never think of the consequences, just how it plays in Peoria.
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You are right. Not a single stock, futures, option, or forex trader was responsible for causing the current economic mess, while plenty of congressmen played a big role in bringing it about by passing laws requiring banks to give mortgages to people who couldn't afford them and by forcing Fannie Mae to lower its standards for the mortgages it buys.
 
Quote from psytrade:

Is the tax only on profitable trades or all trades?

Either way you'll see people trying tax arbitrage strategies - putting the losing end of the trade in the US, while profiting offshore.

Mind you they already do that with most trades with the bigger companies...
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The tax would be on all trades. Effectively it increases your commission by a factor of 10 or more. The government already taxes the profitable trades.
 
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