From The New York Times: Obamaâs Bank Tax Seeks $90 Billion to Repay Bailout President Obama plans to announce Thursday a new tax on 50 big banks and financial institutions to recoup taxpayer losses from the Wall Street bailout. http://s.nyt.com/u/rGW Green comment. This bank fee (tax/levy/insurance) has been in the making a while and it will be hard for the targets to stop it. They can't make sausage deals with some Congressmen as it's going to be in the presidentâs budget. The public on both the left and right have great populist anger against TARP bailouts and Wall Street. The FCIC commission is taking Wall Street to the woodshed. Wall Street made windfall type profits on a crisis large yield curve and are paying very large bonuses while Main Street suffers. This 1.5% fee on big non-tier one asset positions is a new transaction cost for banks. The government promised it can't be passed on to consumers and that includes online traders. Let's get more details and hear the complaints which may highlight unintended consequences. If this is the mechanism for paying back remaining TARP, that undermines the basis for Congressional bills for a transaction tax. Plus the administration has clearly - leaked so far - that a transaction tax is unacceptable since it falls mostly on consumers/investors. Does this new bank fee mean we are safe? It's way too early for Mission Accomplished. Fringe elements won't give up on a FTT but the administration is taking it off the table in the US for the foreseeable future. Global cooperation on a FTT is effectively unfeasible without the US on board! Sorry our win comes at the expense of Wall Street. But they are growing again, collecting high bonuses and should be able to weather this storm. A FTT would have put traders out of business whereas the bank fee is just a cost of doing still very profitable business for Wall Street. Traders still face many new obstacles coming from Washington like access, leverage, capital and more. So keep watching our backs and keep fighting together. Plus we still need to hammer down fringe nails on the FTT when they arise which will still be often. Great work! Rewritten below, the above was from my iphone.
Hmm nearly ALL republicans will vote against the tax, ironic isnt it that Obama lovers on this forum will be bailed out by republicans.
Robert, I wish you could work out a deal with Baron to start an ET "Tax Forum". I know there were some problems in the past with links to your firm, but I'm sure that could be worked out so that both can benefit. Doing taxes for active traders is a royal pain and I know most here could use your help. Good trading to all.
http://thehill.com/blogs/congress-b...427-the-big-question-will-a-new-bank-fee-help Question posed in the blog: Will a new fee on banks help Democrats lower the debt and win public approval? Baker is cited at the end and plugs the transactions tax. You can post comments on the article.
I rewrote my above post from my iphone. This bank fee (tax/levy/insurance) has been in the making a while and it will be hard for the targets to stop it. They can't make sausage deals with some Congressmen as it's going to be in the presidentâs budget. The public on both the left and right have great populist anger against TARP bailouts and Wall Street. The FCIC commission is taking Wall Street to the woodshed and this is softening up the target and empowering the taxman. Wall Street made windfall type profits during the financial crisis recovery with excessively low interest rates from the Federal Reserve, so they had a license to print profits with a crisis-large yield curve. The public views Wall Street as Crisis-Profiteers, like War Profiteers, especially witnessing what they view as obscene levels of bonuses during this fragile Main Street recover. So the governments proposed bank fee of 1.5 percent assessed on big banks non-tier 1 asset positions (the riskier ones) is a new big-bank-only transaction tax. The government promised (so far with the leaks) that this new bank tax can't be easily and directly passed on to consumers, which includes investors of all types including our online traders. Let's get more details today and in the Presidentâs budget, and listen to complaints from the banks which may bring to light valid unintended consequences. If this big bank fee/tax is the mechanism for paying back remaining losses in TARP, that undermines the stated basis for Congressional bills calling for a wider financial-transaction tax. For all proponents of a financial-transaction tax that donât give up their fight, the obvious rebuttal is to say this big-bank fee is a financial-transaction tax on risky too-big-too fail positions and itâs the only way to protect Main Street consumers and investors â the wrongful targets â from a financial-transaction tax. End of story, the proponents got their tax and why try to extend it to unintended targets, the little guy? Does this new bank fee mean online traders are safe from further realistic attack? It's way too early to fly the âMission Accomplishedâ banner. Hardcore proponents like economist Dean Baker (still out to sell his upcoming book on the subject) won't give up on a financial-transaction tax. But, with this new big-bank fee, the administration is taking a wider financial-transaction tax off the table in the US for the foreseeable future. It will be hard to pass a wider financial-transaction tax in any major financial center unless all leading centers cooperate to enact it. With the US opting out for good now â and following what Secretary Geithner said the US would not support - global enactment has even less of a chance than climate control over the next few years. Sorry that our apparent win on no wider financial-transaction tax comes at the expense of Wall Streetâs big banks and other financial institutions (over 50 billion of capital). I feel good that they have recovered from the crisis, are growing nicely again, earning good bonuses and I believe they should be able to weather this government storm. In our case, a wider financial-transaction tax would have put traders out of business, whereas this bank fee budget proposal is just an additional and affordable cost of doing still very profitable business for Wall Street and their brethren. Traders still face many new obstacles coming from Washington like restrictions on naked access, reined in leverage, higher capital, and other regulatory type rules too. Plus, new taxes on the investment community like the Senates proposal for a 1 percent Medicare tax on investment income. Donât forget carried interest tax breaks are repealed for 2011 and the House just passed a bill to repeal them a year earlier in 2010. Capital gains and qualifying dividends taxes are going up in 2011 to 20 percent from 15 percent. All types of taxes are going up and that includes tax attacks coming on the investment community. So keep watching our backs and keep fighting together. Plus, we still need to hammer down fringe nails on the financial-transaction tax when they arise which will still be often. Yes, this is just a proposal for a Presidential budget item and the President needs Congress to approve his budget. Plenty of stuff can go wrong still and we still need to be concerned. But this is more and more shaping up to be a victory for our cause in my view. Great work!
Thanks for this very kind and nice idea. Elite Trader invited our company to be a sponsor in the past and again very recently too. We are considering their sponsorship offer. I also think it's fair that Elite Trader doesn't want non-sponsors like me to include links to our commercial sites in our posts (like my blog); something I am guilty of doing in the past and apologize for. I returned to Elite Trader these past few months to join the important fight against the financial-transaction tax. The last few months have reminded me how nice it is to work closely with you all on this excellent forum. Thank you for your support and kind words.
Comments needed on The Hill. Say it's a far better idea than Tobin tax at least. There need to be someone paying. We can be in trouble if it doesn't pass.
I just heard on CNBC that the banks were totally surprised to learn about this new big-bank transaction tax? How can big banks claim that level of ignorance? For months, we have been fighting a very public call for a financial-transaction-tax intended to address infractions on Wall Street. Main Street traders claimed the tax would too heavily fall on Main Street and Wall Street would deflect it or win exemptions. That would be perverse. The President talked about this big-bank tax in August too. Did Wall Street risk management departments miss this one too? We asked Wall Street to help in our efforts and they raised a blind-eye. Wall Street did not care to help online traders with our petitions and efforts and I don't think we should be cannon-fodder for Wall Street now either in attempting to help them (which wouldn't work anyway).
On stocks the 0.25% tax is equivalent to tripling my commission costs. On forex, if that 0.25% is on the amount of money controlled, it makes short term forex trades unviable. The point of this tax is to kill off traders, who were not responsible for the financial crisis.
divide and conquer works every time. in your scenario it will be your turn to pay the piper. disgusting attitude.