Thank you for mentionning it ! The guy writing this article is a totally stupid man... One thing is sure, it's that this man made the right choice by going to work in the media.... Nowhere else such unprofessionnalism would be tolerated.
One major point that was missed with regards to Harkin is that he mentions the stamp tax in the UK..... Market makers do not pay this tax. Thus what would be the impact on the markets if market makers had to pay the tax ? Then the tax to market makers would be several times the price of the stock in a given year.....the result being there would be no market making function.... The result being that for many stocks, an investor may have to make 20% or more just to break even....some stocks would not have a bid ask.... Another point about Buffett and John Bogle....Their personal businesses rely on buy and hold and are biased....If the transaction tax were passed, many money managers would be out of business because their trading styles would be eliminated....thus investors would have fewer choices....and would have to have a lot of patience.....In Bogle's case......an investor in his famous SP 500 fund has not made a dime in over 10 years....In Buffett's case.....an investor would have to hold and endure drawdowns of over 30%..... If marketmakers were exempted....then the very banks that this populist tax goes after....would be exempt....the result being that the very parties that the tax is aimed at....misses completely.....by only taxing the retail public.... As far as raising money for innovations....there would be no money raised because there would be no market making function.... As far as taxes raised....not 1/100 of the $150 billion would be raised because the market making function would not exist.....and there would be no retail traders..... Also the current tax take generated by trading strategies generated mostly by hedge funds dwarfs the $150 Billion sought.... So the end result would be ...... Highly net tax negative..... Would not tax those for which it aims....Goldman Sachs, Morgan Stanley, and others would be exempt..... Would eliminate more than 40% of current equity value in stocks....no market making function....
I watched the DeFazio video and he is so sure of himself - makes me want to smack him. I guess if you spend that amount of time creating a bill, you become delusional about it. I propose we tax all members of Congress 1% of their AGI everytime they introduce a bill. I mean, it is only fair because Congress bailed out Wall Street even though practically no one on Main Street wanted that to happen. We need a participation fee on Congress. Please support my idea by writing members of Congress. Thank you.
................................................................ There should also be a "media tax".... The rate will be determined based on a per unit basis.... The tax will be a small 5% per add on per unit....This tax take would dwarf the amount that a transaction tax would produce.... This tax does not hurt production in the US because it is an intangible product.....and quite frankly the US has too much news.... Furthermore all advertising on paper will be taxed 10% because the manufacturing of paper causes the loss of trees and pollutes the environment....
.......................................................... This is soooo simple.... DeFazio/Harkin needs to be confronted with one question .... Who is going to make the market in the stocks ? Regarding the past when there were such taxes....market makers were exempt.....or there would have been no marketplace..... So again....are market makers going to be exempt? If so...then who is actually paying this tax ? It is not going to be Goldman Sachs or any of the rest of the banks..... The payor will be the Retail Investor..... If GS and others are exempt....then what is the amount of taxes to be raised ? Why is Buffett and Bogle interested ? Because it would eliminate much of their competition....they hope.... Would it....There would be a lot of pools changing their labels to market maker status....perhaps not..... By the way DeFazio/Harkin....do you have any background personally that would qualify you to impose laws on the securities industry ? Both have none....along with Pelosi....
I would like to see a tax or penalty for the so called impartial, professional, mainstream media spreading misinformation and calling it informative news. This activity is socially unproductive, as they like to call trading. A one cent stamp tax for each word that they write would be fair. The tax would be applied one cent per word as it is read by each reader and one cent again applied to the media source, so really two cents per word as it is distributed from the seller(media) to the buyer(reader). This would lessen the number of socially useless people with misinformation in their heads. It would raise much needed revenue. Using the DeFazio method, I would say $3.5 Trillion per year. We could spend it all on much needed social programs like The Funny Walks Program that would teach the sad and unfortunate how to walk funny.
Brown and the UK Treasury are pushing the transaction tax today in a report in london. So this is where it gets chippy. Hoyer as well as pelosi want it to be global. I think they only really care about the UK , if the UK goes ahead and talks this up there could be back door meetings with the US. Also there is a European meeting this week, where they are going to talk about the tax again, so we shall see what kind of agreement they might have out of that. Keep our eyes open.
yesterday on cnbc i think i read something like this: obama: "view every bill through the lense of job creation" (-- since a t.tax would actually COST jobs - forget it.)
............................................... The tax seekers need to be asked one question in a way such that they can understand.... Are market makers going to be exempt from the tax ? If not....then how is buying and selling going to happen ? In the past market makers were always exempt. In the US direct access technology and ecns have replaced a significant percentage of market making functions.....They make up perhaps half of the market making function.....Thus a new category or the market making function will have to be extended to those who are actually creating the markets.... The bottom line question being what would happen to projected revenues if there is no market making function ? Then one should question taxing advertising....as there is a surplus of duplicative nontangible advertising that really does not produce anything for society....Paper advertising should be taxed more because of pollution and energy usage....
Guys, relax. This tax is never going to happen, as it HAS TO BE globally. Do you really think the uprising Asian countries like Singapore, HK, etc. or Switzerland would decline this incredible gift from the US and UK if they handed it to them on a silver plate? This would be financial and economical suicide for the US. Every lobbyist knows this. They work on its rejection silently, in order to not affront the dumb masses. Heck, even in Germany this is completely off the tables since the elections.