Happy Holidays and Merry Christmas! It's nice to be working together on this effort. Have a great year ahead!
MERRY XMAS FELLOW TRADERS! I added the following writeup to the Wikipedia Tobin Tax 'Arguments Opposing' section. Hope no-one sues me! Research Analyst Marion G. Wrobel examined the international experience with financial transaction taxes in a paper prepared for the Canadian Government in July 2006.[24] Wrobel highlighted the Swedish experience with financial transaction taxes. In January 1984, Sweden introduced a 0.5% tax on the purchase or sale of an equity security. Thus a round trip (purchase and sale) transaction resulted in a 1% tax. In July 1986 the rate was doubled. In January 1989, a considerably lower tax of 0.002% on fixed-income securities was introduced for a security with a maturity of 90 days or less. On a bond with a maturity of five years or more, the tax was 0.003%. The revenues from taxes were disappointing; for example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kroner per year. They did not amount to more than 80 million Swedish kroner in any year and the average was closer to 50 million.[25] In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kroner by 1988. [26] On the day that the tax was announced, share prices fell by 2.2%. But there was leakage of information prior to the announcement, which might explain the 5.35% price decline in the 30 days prior to the announcement. When the tax was doubled, prices again fell by another 1%. These declines were in line with the capitalized value of future tax payments resulting from expected trades. It was further felt that the taxes on fixed-income securities only served to increase the cost of government borrowing, providing another argument against the tax. Even though the tax on fixed-income securities was much lower than that on equities, the impact on market trading was much more dramatic. During the first week of the tax, the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. On 15 April 1990, the tax on fixed-income securities was abolished. In January 1991 the rates on the remaining taxes were cut in half and by the end of the year they were abolished completely. Once the taxes were eliminated, trading volumes returned and grew substantially in the 1990s. My sources were:- http://dsp-psd.tpsgc.gc.ca/Collection-R/LoPBdP/BP/bp419-e.htm#(6)end http://papers.ssrn.com/sol3/papers.cfm?abstract_id=338864 http://ideas.repec.org/a/eee/jfinec/v33y1993i2p227-240.html
Happy Holidays to you. We need to let the public know that this is not or "black pool tax" or HFT tax. It affects everyday investors. MMs & broker-dealers may well get an exemption.
http://m.spiegel.de/article.do?id=668694&p=0 interesting overview from Germany. Higher bank capital is the answer. otherwise government takes insurance levies or taxes and it disappears in spending - leaving moral hazard for risk takers in banks.
http://www.capco.com/files/pdf/70/0...ion taxes and financial markets (Opinion).pdf I think this 2003 article makes a good case against a FTT...much information on the Swedish experience in layman's terms. I have already written to the IMF and agree that every single one of us reading this thread needs to do the same...
correct link: http://www.spiegel.de/international/world/0,1518,668694,00.html transaction tax: second page of report