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fhl

Registered: Nov 2005
Posts: 3039

01-13-09 05:44 PM

Quote from omegapoint:

[QUOTE] "

Somebody explain to me where the profit comes from if not from the bagholders? Nothing new is created or am I missing something? Aren't you just substituting one potential purchaser for another for a net unchanged economic stimulus?

I'd be happy to.

For an economy to work efficiently, there needs to be price signals. Price signals allow for capital to be allocated to it's most productive uses. That's one thing speculators do. Provide price signals. If Obama and his team try to tell us where capital should be allocated, we are in for an implosion.

The other thing specs do is provide liquidity so that when price signals give the signal that capital should be moved to a more productive source, it can easily be done. Liquidity is there to do it.

Hope that helps, but I've read some of your posts in p and r, so I know that you will never be convinced.

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1flyfisher

Registered: Jul 2007
Posts: 1113

01-13-09 05:55 PM

This is a stupid idea and the idiots proposing this have no clue.

This would destroy financial markets and liquidity and right now in the world we need as much liquidity as we can get.
Trading would halt for more than just the little guys.

I have a Master's in Taxation and have studied Tax Law, spent years in Law libraries, read our Code, Treasury Regs, Court Cases and have seen some ridiculous shit in our code. I hope this doesn't take hold.......But.....
Once this economy turns around Obama is going to Tax the shit out of the wealthy and you can count on BIG CAPITAL GAINS tax increases.

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wjk

Registered: Nov 2007
Posts: 1649

01-13-09 05:59 PM

Quote from seasideheights:

"Let's be hopeful that some real thought and study is done before this idea takes root in Congress."

Unfortunately, congress is the last place that thought and study will occur.

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gnome

Registered: Jun 2002
Posts: 10007

01-13-09 06:00 PM

Quote from 1flyfisher:

"... Once this economy turns around Obama is going to Tax the shit out of the wealthy and you can count on BIG CAPITAL GAINS tax increases.

Perhaps there is still hope, then. I think it likely NObama will be out of office by the time the economy "turns around and is healthy" again...

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1flyfisher

Registered: Jul 2007
Posts: 1113

01-13-09 06:02 PM

Yes, everyone go there and post a well thought out commentary opposing this.

Quote from seasideheights:

The author of the NY Times article will think his idea is terrific unless posts against the tax make it into the comments section of that story. Consider doing a quick post there.

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NielsenDK

Registered: Oct 2007
Posts: 93

01-13-09 06:05 PM

Quote from DmanX:

It wouldn't be taxing profit. They already do that and call it an income tax.

Allegedly, they would tax some value of the transaction - like a sales tax. Problem is, futures contracts have no intrinsic value. They have notational value.

There is no buy and hold strategy with futures as they are wasting "assets."

So, let's say they decided on the notational value upon which to base the tax. Take the E-mini S&P 500...

It's notational value is $50 x the index price. So, if the index were at 1000.00, the notational value would be $50,000.

Tax on that, per side, would be $50,000 x .0025 = $125. Or $250 round turn.

Wow, this better not be going trough, it would be absolutely devastating.

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