Hi, you know that at the g20 they want to impose a financial tax (from 0.01 to 0.05) % on ALL financial transactions..... it's NOT a tax on profits, but transactions, which mean each time you open a position, you must pay a tax on it. I'm surprised it's not talked more.... because this will KILL day trading, don't you think ?
It's been mentioned a few times in this thread: http://www.elitetrader.com/vb/showthread.php?threadid=150546
1300 pages right here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=150546&highlight=1/4+tax and the answer is YES.
Yes. It will destroy trading and economies around the world. Choke off capital and you can say goodbye to many things you take for granted now.
It will never see the light of day. Defazio (OR) is a f*cking idiot, and Bernie Sanders couldn't run a business if his life depended on it. ULtimately, the proposal will fail because the tax simply doesn't make sense. How can a trader LOSE on a trade and still pay tax?! Shows how ignorant the POLITICIANS are. WE NEED TERM LIMITS AND CAMPAIGN FINANCE REFORM.
... but we already pay commission, spread, ticket fee, etc on trades even if they lose. So why is it a strong argument that it somehow doesn't make sense that a tax should be paid on a losing trade? I think there are lots of reasons why this tax is bad, but the above reason is a poor one IMO.
Don't forget sales tax. If you buy something tangible, you pay sales tax. if you resell it at a loss you don't get sales tax back.
It really depends on just how fascist these socialist become and how extensive their power becomes. If they just pass this on the USA, then it will do nothing to traders, just destroy the American financial system. But still, most of us will merely take our capital and move it to hong Kong or Singapore or somewhere else where the tax does not exist. However, if they then take the society towards a world wide fascism, like a world government of some sort with capital restrictions, then, well, yes, it's over. But then not only is trading over, but the world is over since we'd all be complete slaves and serfs anyways. At that point, we probably wouldn't even be able to afford computers and the Internet, we'd all have our picks and hand tools and be working the farms for our masters.
There is a difference between an investment and a consumption good. The sales tax does not relate. I just traded a few million dollars worth of oil futures today and basically made no money. I'd be paying something like, let's figure it out: $2,000,000 x .01 (if it is a 1% tax) = $20,000. LOL. A $20k tax in one day for day trading a few oil contracts.
If the proposed 0.03 of 1% (Defagio bill), you would pay $600 in and $600 out (and the counter-party would pay the same thing!!!). Still MASSIVELY insane and would kill day-trading, and some swing trading (like me) and liquidity would drop well over 50%. Retirement accounts and pensions would get hit pretty bad as well. One study said the average retirement account would lose $100,000 by the time comes to retire due to this insane tax. This is the most socialist, liberal tax yet. The unions and the democrats (well, a lot of dem's have come out in support of OWS) are wanting this. Just amazing how bad this tax is, and how the socialists lefties kept pushing it....this all makes me feel this is a bigger vendetta against capitalism. Just look who is behind the curtain....it's scary.