Tax on Trades Should Be Part of Rescue Plan, Some Democrats Say

Quote from bbqbbq:

you're absolutely right. daytrading gives only liquidity.

but if you think about it, they also give alot of taxes. think about it. daytrading is basically a zero sum game, except for dividends, and most people lose their money. price appreciation comes solely from dumping shares at the larger fool who is willing to pay more for them.
the people who make money in daytrading, pay income taxes. but that exact money comes only out the pockets of other people who lost money, and that money has already been income taxed. so basically money won is double taxed. if the money comes from dividend, you have dividend tax. and i believe there is also company profit tax already on the money that is used for dividends.

so basically daytrading provides a platform that creates more taxes for the government, if i'm correct about this. so if they kill daytrading, it wont necesarily create more taxes in absolute dollar value. what would change is less newbies losing money and less jobs in the financial industry and less liquidity. the first thing is probably a good thing, don't know about the second two.

actually, the biggest enemy of the government is the buy and hold investor. they only hold, thus never pay taxes.
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I'd say you're correct, but not taking it far enough.

Say you're a moderately sucessful, pro trader, made $200k this year. So 200k is gonna be taxed.

On the other side, there's 20 losing traders, playing around, that lost 10k each, so the guv lost 200k in taxable income, right?

Wrong. You can only claim a 3k loss, so taxable income was reduced by only 60k.
 
Since they can't fix the problem, they may as well burn some witches. Nobody likes witches. Nothing new here. Just be thankful they only want to put you out of business.
 
Quote from GermanTrader:

Yes, they can be that ignorant. Gentlemen, these people don't read their own legislation. They only read summaries, written by someone else. And that statement above is a gross, poorly-aimed, summarized, sweeping generalization of investors and traders.

If the people had any power at all to fire these jerks, we could be as general and proclaim that all politicians are swindlers who steal from taxpayers and shit on them when they ask questions.
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while driving last week, i heard a lady representative trying to discuss naked short selling, which she blamed on the uptick rule... so you see, it was all because of the lack of uptick rule:D
 
Quote from bbqbbq:

actually, the biggest enemy of the government is the buy and hold investor. they only hold, thus never pay taxes.
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you just described Warren Buffet and provided the basis for a "wealth tax". buffet is worth a lot less if you back out unrealized tax liabilities.
 
Look.....

Just ask those people who owned buildings in the tax reform act of 1986.....

Anything can happen...

Obama benefited from and supported individuals in FNM, FRE....

McCain says he's a spendthrift...but his wife has been known to spend $500k a month on AXP...his kid spent $50k.....in a month...and he's tellin the US he is going to balance the budget?......

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And the bottom line to the crisis is a few million bad loans which were levered out at institutions....

The problem is real estate ....

Thus is no surprise that the politicians are trying to look somewhere else...

...............................................

Here's a few items...

Tax credits to buy a house...will help comps....

Tax credits to stay in a house.....

Low interest fixed 30 year loans for those who want to stay put....will ease lower comps......

Ease mark to market accounting rules.....for what's on the books....

Increase tax credits versus time of hold on houses....
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Phase these rules out over 5 years....
then back to 20% down min....managed locally, etc...
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One is not going to find a solution for home real estate jackin folks around that work in stock markets....

But F'in morons.....are just that.....

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If you want to listen to something substantive ...listen to the Roubini conference call....

Roubini has a good handle....

http://www.rgemonitor.com/
 
Quote from GermanTrader:

I guess I am still missing it. Why would traders be penalized for what the mortgage banks who loaned the money to poor payors are solely responsible for? Deep pockets? Or is this just another money grab to tax what isn't already taxed at every stage? Mother fucking politicians...
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anyone w/o political clout is an easy target for govt. daytraders have no clout & the brokerage industry probably doesnt have enuf influence, so if this passes, the next step when they add to the $700B will be to increase the tax rate from .25% to .50% & so on... so maybe they start with .25% and a few exemptions, such as ETFs, then the ETFs get taxed, maybe at .25% when they raise the "base" trading tax to .50%.

this is the kinda action that killed the horse racing industry where takeouts on exotic betting pools are like 23% so instead of a $500 exacta, you get like $375 - thats a big price to pay to risk your money. :eek: - you see that the payout would have been almost a 1/3rd higher! then the tracks use breakage, where a $2.39 payoff on a $2.00 bet is rounded down to $2.20... only $.19, right? well its almost 10% of the payout and appx 50% of the winnings... you cant beat that set-up & eventually only the VERY BEST traders will beat the trader's tax.

eventually, after they lock down capital controls, there will be a wealth tax, so you will be screwed if you trade and screwed if you dont trade, and it will be a crime to try and pick up your money and leave. there is already and "exit tax" for people that are fed-up and just wanna leave... you leave anytime you want, but you can never (really) checkout. this is the beginning of the end, b/c once its in place it will never be repealed, only the tax rate will change, and it will only go in one direction.
 
Quote from QQQBALL:

anyone w/o political clout is an easy target for govt. daytraders have no clout & the brokerage industry probably doesnt have enuf influence, so if this passes, the next step when they add to the $700B will be to increase the tax rate from .25% to .50% & so on... so maybe they start with .25% and a few exemptions, such as ETFs, then the ETFs get taxed, maybe at .25% when they raise the "base" trading tax to .50%.

this is the kinda action that killed the horse racing industry where takeouts on exotic betting pools are like 23% so instead of a $500 exacta, you get like $375 - thats a big price to pay to risk your money. :eek: - you see that the payout would have been almost a 1/3rd higher! then the tracks use breakage, where a $2.39 payoff on a $2.00 bet is rounded down to $2.20... only $.19, right? well its almost 10% of the payout and appx 50% of the winnings... you cant beat that set-up & eventually only the VERY BEST traders will beat the trader's tax.

eventually, after they lock down capital controls, there will be a wealth tax, so you will be screwed if you trade and screwed if you dont trade, and it will be a crime to try and pick up your money and leave. there is already and "exit tax" for people that are fed-up and just wanna leave... you leave anytime you want, but you can never (really) checkout. this is the beginning of the end, b/c once its in place it will never be repealed, only the tax rate will change, and it will only go in one direction.
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I fear you're right. But I must wonder when they'll make the trading tax retroactive a few years just to really bust ALL traders, even the big guys.
 
A few questions/comments IF this ridiculous tax passes.

1. Could we now just trade on CMC markets? With the amount of traders that would flock there, I would assume the spreads that everyone complains about would get tighter


2. I think traders are traders and will find a way to make money. Therefore, I believe the small-cap market is explode, as would the option markets as they offer far larger % moves to overlap the 0.25% deficit on every trade

3. Would Canadians have to pay this tax?
 
Quote from IanMacQuaide:

I fear you're right. But I must wonder when they'll make the trading tax retroactive a few years just to really bust ALL traders, even the big guys.
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i suspect only to January 1, 2008.
 
What you might want to think about is who really does the most trading today......and if they have any political clout....

Big pension plans and the largest pools that have a lot of stocks....

Hey obviously Dean...had a little influence with regards to debt securities.....people like Gabelli and others laugh at crap like this....

I really do not think that they will tax securities in this fashion....

Ain't gonna happen.....
 
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