All of the historical information contained in this article is completely irrelevant as it relates to today's situation, for one simple reason: globalization and the internet. Over the course of the 20th century, governments could impose whatever tax they wanted on the US financial markets and make it stick. This is not so today. Today, traders can go and trade on any exchange in the world. If they actually impose a tax like this, traders would leave in a microsecond and go somewhere else like Eurex, Nikkei, Hang Seng, or wherever. They didn't have that option for most of the past 100 years. Secondly, the internet has made short-term trading a lot more possible, and significantly narrowed spreads. The effects of a tax like this will be felt much more severely in today's markets than they would have been even 20 years ago when spreads were a lot wider. This idea cannot work today, unless there is a global effort to institute this tax across all countries and all financial instruments, because the money will immediately flow to whomever is smart enough to not implement this tax. In today's economy with governments needing money desperately, someone would break ranks.
IMO, the only way to get any outcry against it is to label it. Never call it a transaction tax again, as long as there are no exemptions it has to be called the '401k tax', or 'retirement tax' whatever gets the masses stirred up ie. 'death panels'
Never thought that history was ever irrelevant since the fools we have running the government make the same mistakes over and over. If you want to know what politicians will do now all you have to do is look at what they have done in the pass. The government wants total control over everything. What better way to gain control over the financial markets then to tax them? The more mayhem it causes the quicker they can set up an entity to manage the order flow or use a proxy as they do now with GS. Only difference between GS now and GS offically sanctioned by the government is it will be legal.
The point is that they CAN'T - not without international help. They did it over the past century because the money was locked in, and investors had no other options but to keep trading US markets. When money has an option to leave a bad situation, it does. So what they were able to do in the 20th century was raise taxes and not really affecting trading volumes, thereby giving them more revenue. They can't do that any more, since the money would find ways to leave the country one way or another, and go somewhere else that didn't have a huge tax. Also, as I said, the effects of this type of tax were negligible in the past because spreads were already wide. Now they have narrowed, so the resulting volume drop-off would be significant. That would seriously hurt the exchanges. If they ever did implement a tax like this, they could not make it stick and it would be repealed within a year or two. Nevertheless, it doesn't mean that we shouldn't fight them - but the chances of it ever passing are extremely small.
"- but the chances of it ever passing are extremely small. " I would not take your word for it. with the afl-cio and US gov't desperate to raise revenue it seems like a no brainer to these people even if their projections are wrong.
Of course it seems like a no-brainer to them - but to be blunt, those people are a bunch of stupid idiots. They don't run the government, and you need a lot more support than a crazy communist whack-job like DeFazio and some idiot unions to make something like this pass. There are actually some smart people in government who do realize the effect this tax would have, and you haven't seen anyone significant supporting it. The AFL-CIO is not significant, since they don't set policy. They are lobbying for it, but that doesn't mean that they have any real shot at getting powerful support. When someone influential in government supports it, then it will be time to worry. Right now we should still be vigilant and fight it, but realize that the only ones pushing for this are a bunch of hippie nut-jobs and a few clueless media retards like Erin Burnett.
contact Congress The Proposed Securities Transaction Tax: Punishing the Wrong Group there is a petition that can be sent for free to Congressional representative: http://www.rallycongress.com/no2tradertax/ An online mechanism (https://writerep.house.gov/writerep/welcome.shtml) for writing your Congressional representative about this and other bills shout out to Forex Factory (http://www.forexfactory.com/news.php?do=news&id=153697) for pointing that out and highlighting the issue there have been 1200 posts. how many of u are willing to write or have written to congress of the US?
I agree. I think the chances are huge since GS will likely be given more control over the markets. The unions want it. Obama flubbed health care. This would be an easy thing to give the socialist left to pacify them. Who cares about a few daytraders?? BTW, France has said they want a stock tax. UK already has one as does China.
Their Prez had been talking about. You can google it if you want. Here is one article I found. http://sayanythingblog.com/readers/entry/a_percent_here_a_percent_there_you_will_never_even_miss_it "Taxing financial transactions has gained some momentum in Europe. Lord Adair Turner, chairman of the Financial Services Authority, Britainâs top banking regulator, voiced support for taxing financial transactions in a recent magazine interview. The French government has endorsed the idea as a way to fund development in poor countries."