Forums > Trading for a Living > Taxes and Accounting > 1/4% Tax on all stock trades pushed in NY Times today

Old Nov 25th, 2009, 02:27 PM   #2527
Join Date: Feb 2009
Posts: 146
Jim Cramer has posted a response in the comments section followed by an excellent rebuttal from someone. We need to post additional comments along this line.
Old Nov 25th, 2009, 03:48 PM   #2528
Join Date: Mar 2009
Posts: 53
The simple point is...

Anaconda is largely correct.

There is an unholy alliance, to boot, between big gov. and big corporate well lobbied entities like GS. Back years ago stock comission fees were like 50-100 bucks EACH way. Now it can be as little as a dollar (IB).

But WS hates little retail prints like most of us. This tax, and critical big boy exemptions for GS and others, allows them to thin the herd, as we are not capitalized enough to survive the new costs of doing business.

They know this.

So does the Gov.

As usual, the little guy gets the rump.
Old Nov 25th, 2009, 03:57 PM   #2529
Join Date: Aug 2001
Posts: 822
Quote from Anaconda:

This has been discussed to death and so few of you actually understand what is going on.

It's very simple. The major Wall Street banks will get exemptions and the rest of the traders, particularly the small retail daytraders will go bye bye from the industry. That should create more applicants for the Armed Forces and Obama's "volunteer" programs, while Goldman and the gang get to enjoy fat ass margins on market making and prop trading. Institutions will still move stock around and pass the costs down to the investors.

Creating arguments how this will destroy jobs is like beating on a dead horse. The lackeys pushing this through publicly may not know what is going on, but those financing these lackeys know exactly what they are doing.

Get it through your head. This transaction tax is not an idiotic idea. It's great for a small minority and very bad for a large majority.

Oh and finally. The politicians do not care what you think, at least most of them. You are not the ones financing their campaigns or promising them favors after their terms. They really do not care. You can always check back to the overwhelming public resistance to the bailout bill and how that worked out.
how would they justify an exemption for those few big players? those who caused the big mess should then be the only ones NOT to pay that tax? and every single small trader/investor who saves and invests money for retirement will pay?

that tax would put most brokerages out of business - at least all those who serve daytraders. it would hurt software- and data vendors, etc. and most of all - it would more or less KILL derivative exchanges and extremely hurt stock exchanges.

if those few big players would be the only ones NOT to pay the tax - who in the world should take the other side of their daily trading activity??? small investors who make a buy or sell every few weeks? does anyone really believe that?

how should such a tax raise a lot of money - if liquidity will simply be gone? it simply cannot work. at least not with something like 0,25% per side for every buy and sell. maybe 0,05 or 0,01 or whatever - if at all. question remains how much money it would actually raise.
Old Nov 25th, 2009, 04:03 PM   #2530
Registered User
Join Date: Aug 2003
Location: Long Island, NY
Posts: 696
Let's look at this from high atop the mountain. He are some of my thoughts:

- Obama, who purported himself to be anti-Wall Street during his Presidential campaign, was full of crap. He has done next to nothing in terms of Wall Street reform, and still has these Big Boys (Goldman, e.g.) in his back pocket;

- The average Joe will see this tax as a good thing, since naively they will think that this is a tax on Wall Street;

- Needless to say, this tax will hurt retail traders that do this for a living. Undoubtedly, it will put a great money of them out of business;

- Although institutions still make up a majority of daily volume, there will be decreased liquidity in the markets at large. This will result in larger spreads, and more violent moves in the markets (on events). This could actually be a lucrative opportunity for day traders that ride this tax out;

- Congress couldn't manage themselves out of a paper bag (this has been a phenomon for the last 9 years), so how on earth does Pelosi think that she can engineer a tax outside of the US borders ? Seriously, does she even have the remotest clue ?

Given the dire nature of the state of our leveraged economy, I believe that the govt will be open to any sort of tax increase. And of course, the Big Boys that provide government with contribution cash flow, will all get exemptions. I mean, why should Goldman have to pay more than a 1 % Marginal tax rate on 6 BB profit ?? Welcome to the world of Socialism.
Old Nov 25th, 2009, 04:18 PM   #2531
Join Date: Feb 2005
Posts: 448
In case the day comes and everyone is beginning to realize that this tax might become inevitable, you must push your senators that it is implemented in a fair manner, i.e. like the proposed Tobin Tax [0.0001% - 0.001% with NO EXEMPTIONS] instead of the unfair nonsense that is floated now [0.25% for -in fact- private persons only, GS and the other creators of 2008 desaster are EXEMPT]
Old Nov 25th, 2009, 04:22 PM   #2532
Join Date: Apr 2006
Posts: 290
Quote from gerry875:

[B]how would they justify an exemption for those few big players?
I don't know how they justify it, but here's one recent example. Defazio's attempt earlier in the year to punish evil energy speculators (HR 3379) has the following exemption:

‘(c) Exception for Commercial Traders- The tax imposed by this section shall not apply to any transaction if--

‘(1) either party to the transaction is--

‘(A) classified by the Commodity Futures Trading Commission as a commercial trader with respect to oil, or

‘(B) a financial institution acting on behalf of such a party (but only if the financial institution does not at any time acquire ownership of the security), and

‘(2) the transaction is a bona fide hedging transactions (within the meaning of section 4a(c) of the Commodity Exchange Act).
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