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Trader Tax
- Thread starter FutsTrader111
- Start date
DeFazio wants to curtail speculative activity that causes commodities to needlessly go up in price. He's focused on oil in particular. Speculative activity in self-contained ecosystems like casinos, sports, etc. doesn't drive up prices for our daily necessities.Quote from tomahawk:
If the trader tax is to discourage speculative activity (i.e. "gambling"), why don't they tax the hell out of casino gambling and lottery tickets??
Also, casinos in NJ are taxed on their gross revenue. 8% of what you feed into the slot machine is sent to the government.
Lotteries are run by the govt and generally pay out 50% of their revenue, so that's essentially already a tax.
The PDT rule was to protect brokers who ran the risk of having small daytrading clients blow out their accounts but had very little compensation otherwise - a daytrader doesn't generate much in margin interest, and small account daytraders don't have much in their account for the broker to lend out to others. Any assumption that it was meant to prevent bubbles in the future is off the mark.Quote from saliva:
Think about the PDT rule for a moment. Was it those undernourished traders with account size less than $25,000 that bid up the Nasdaq stocks which led to the spectacular burst in 2000?
If someone buys $550K worth of a single stock, he is not an average or small investor. The average investor buys mutual funds; mutual funds are exempt from the tax.Quote from FutsTrader111:
"The tax would not directly strike the average or small investor, DeFazio said. Tax-preferred retirement accounts such as IRAs and 401(k)s would be exempt as would the first $100,000 in trade."
Now Defazio is seeing how stupid his bill is. So if you invest in 1,000 shares of Google at $550/share, $450,000 of that would be taxed at 0.25% ($1125).
Quote from loufah:
DeFazio wants to curtail speculative activity that causes commodities to needlessly go up in price. He's focused on oil in particular.
If is concerned about oil in particular, when why tax all equity transactions?
Furthermore, I find it amusing that DeFazio had so many complaints about speculators when the commodities went up in price. Where was his complaint about the speculators when the commodities went down in price? As I recall, nobody said a peep when oil went down.
Quote from JOSEF:
If is concerned about oil in particular, when why tax all equity transactions?
Furthermore, I find it amusing that DeFazio had so many complaints about speculators when the commodities went up in price. Where was his complaint about the speculators when the commodities went down in price? As I recall, nobody said a peep when oil went down.
Exactly. That makes no sense. If you're really worried about rising commodity prices, why would the tax rate for equities by 10x that of futures contracts?
Also, I love how people who have no clue about how markets work, absolutely detest "short sellers" on stocks, etc, but then they turn around and hate people who are long commodities.
These people act like traders only trade in one direction The fact is, oil traders will gladly ride oil down to $10/bbl if they're short. Most traders except your perma-bears will gladly ride the Dow to 30,000 if that is the direction of momentum.
Quote from loufah:
If someone buys $550K worth of a single stock, he is not an average or small investor. The average investor buys mutual funds; mutual funds are exempt from the tax.
Mutual fund returns will also be hit as liquidity providers will be hit wit the tax and will price it into the spreads. Of course, many have postulated that an exemption for large B/Ds would be slipped into any "final version" of the bill, under which (likely) scenario everyone gets exemptions from the tax except individuals who choose not to invest in mutual funds, with their high fees (relative to mean performance) and mediocre mean returns.
Perhaps this bill should be renamed "Rewarding Wall Street by Punishing Small Investors for Big Banks' Mistakes".
Quote from occam:
Mutual fund returns will also be hit as liquidity providers will be hit wit the tax and will price it into the spreads. Of course, many have postulated that an exemption for large B/Ds would be slipped into any "final version" of the bill, under which (likely) scenario everyone gets exemptions from the tax except individuals who choose not to invest in mutual funds, with their high fees (relative to mean performance) and mediocre mean returns.
Perhaps this bill should be renamed "Rewarding Wall Street by Punishing Small Investors for Big Banks' Mistakes".
Great posting. Most people currently hate "Wall Street" and they naively think this tax will hit "Wall Street" where it hurts. In reality, the big boys that they are after will either get exemptions from this tax or they will simply pass this tax along to the average individuals. Of all the misguided taxes, this one takes the price.
He has proposed multiple bills. The one targeting oil trading is described at http://www.defazio.house.gov/index.php?option=content&task=view&id=490 . Here is a cringeworthy quote:Quote from JOSEF:
If is concerned about oil in particular, when why tax all equity transactions
A transaction tax on crude oil securities will close the gap in funding a twenty-first century transportation system while lowering the price of oil. This is a win/win.
Very true, but remember the constituents in most of the country want a stock market and a housing market that go up faster than inflation, and a food and oil market that go up slower than inflation.Quote from clacy:
Also, I love how people who have no clue about how markets work, absolutely detest "short sellers" on stocks, etc, but then they turn around and hate people who are long commodities.