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Old Jan 13th, 2009, 01:21 PM   #79
drukes1234
 
 
Join Date: Aug 2002
Posts: 1,050
You guys realize this has been floated around for YEARS and while it would kill all of us, we shouldn't absolutely freak out because of some little NY Times article. DeFazio has no pull and Sommers when last asked about the transaction tax said it is not realistic and would do more harm than good.

Yes this is VERY scary but I can find articles promoting the transaction tax almost daily and from all the way back to 1998. I am actually confident Obama has a smart enough team around him that this won't happen, especially Larry Sommers.
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Old Jan 13th, 2009, 01:22 PM   #80
omegapoint
 
 
Join Date: Jan 2007
Posts: 3,810
Quote:
Quote from fhl:

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.
You're probably right, but I will not resort to name calling and I appreciate that you didn't. When someone is civil with me I'm glad to be civil with them.
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Old Jan 13th, 2009, 01:24 PM   #81
Businessman
 
 
Join Date: Oct 2004
Posts: 1,119
Quote:
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.
A large fund buying and selling 50,000 e-mini S&Ps would pay over $10 million in taxes.

All the futures markets would just die.
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Old Jan 13th, 2009, 01:24 PM   #82
illinimatt81
 
 
Join Date: Nov 2006
Location: Chicago, IL
Posts: 388
Quote:
Quote from drukes1234:

You guys realize this has been floated around for YEARS and while it would kill all of us, we shouldn't absolutely freak out because of some little NY Times article. DeFazio has no pull and Sommers when last asked about the transaction tax said it is not realistic and would do more harm than good.

Yes this is VERY scary but I can find articles promoting the transaction tax almost daily and from all the way back to 1998. I am actually confident Obama has a smart enough team around him that this won't happen, especially Larry Sommers.
Very true, a lot of discussion. For a bill to become law it would be a very difficult task to surmmount the lobbying pressure, getting the bill out of committee and endless debate on what exceptions there might be. During all of this a congressional session might end thus killing the bill and having it needed to be reintroduced. By then the circumstances driving support may have changed.

Still, we all should take time to contemplate what each of would do to continue with what we do in the case it becomes law. At least get some thoughts going to protect ourselves.
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Old Jan 13th, 2009, 01:28 PM   #83
short&naked
 
 
Join Date: Jul 2008
Posts: 1,492
"While the fees would be a trivial expense for what the general public tends to think of as ordinary traders — people investing in stocks, bonds or other assets for some reasonable period of time — they would amount to a much heavier lift for speculators, the folks who bring a manic quality to the markets, who treat it like a casino."


... and who provide liquidity!!!
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Old Jan 13th, 2009, 01:29 PM   #84
Landis82
 
 
Join Date: Jul 2006
Posts: 8,592
Quote:
Quote from obama-lama:

Securities Transaction Tax (STT) is coming. Nothing new. Now being propelled by the very State that has already lost the most based on taxation of financial services and in the future will lose the most by enabling such tax.

You give a NY Times journalist far too much credit. He didn't even give any credit to James Tobin or John Maynard Keynes who first proposed this kind of a tax back in 1930. Instead, he lauded economist Dean Baker from the CEPR in Washington.

Again, this legislation was originally proposed in Congress by Reps DeFazio (OR) and Wellstone (MN) back in 2000 as a way to tax short-term, cross-border foreign exchange transactions to deter speculation. Some of the dumbest Reps in Congress ( such as Marcy Kaptur of Ohio) co-sponsored the bill.

Suffice to say, it lacked VOTES back then and it will lack VOTES now.

But once again, ET doesn't understand this kind of legislation.
In fact, it's practically a waste of time posting here.
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