This is designed to limit HFT. If you've ever coded up a simple breakout HFT algo, the equity curve is a smooth parabola................. we're talking poaching the markets for suckers. you can't harvest all the fish, and have more next year.
Yes, and I'd bet dollars to donuts, that union pensions would be exempt. Tom Harkin (D-Iowa) was quoted as saying..."It's such a small tax, that I bet no one would even notice it" That is how clueless these *ssholes are. Senator Harkin, I know there is a pretty low intelligence threshold for your job, so let me spell out who would be impacted by the tax: Anyone with a pension Anyone with a 401k Anyone with a 529 Anyone with a non-tax advantaged retirement account Anyone that flies on airlines as it would cost dramatically more to hedge for airlines Anyone that eats at restaurants (again hedging) Anyone that purchases food from supermarkets (farmers and food producers now have larger hedging costs) That is off the top of my head in about 30 seconds. Granted, the average American voter probably has no clue this is even being discussed and further wouldn't know how much it would impact them..... Shame on us as voters.
A percentage tax would kill most traders who use any kind of leverage to try and scratch out a few bux, and who measure hold times at anything less than years. It scares me that those azzwipes are pushing for that shiite. If I have to, I'd pay a reasonable commission type tax. Hell, even a dollar per trade extra commish wouldn't put too many out of biz...except maybe the millisecond guys that bang out thousands of trades an hour. I'd pay it, if it would shut those f**kers up. They'd still get billions to throw away on welfare 99%ers...
FTT will kill the day trading industry. Here's my draft blog thoughts tonight. I write about this threat often for Forbes, Active Trader, Benzinga and my own blog. Please join Traders Advocacy to fight against FTT and other threats to traders. http://www.tradersadvocacy.org/Membership.html FTT is a vendetta or ignorance from the left. The G-20's hyped showdown for FTT proposals is here and gone. OWS, nurses, Bill Gates, Robin Hood, the Catholic Church and the vocal Franco-German coalition gave FTT their best shot. They failed. Rep. deFazio and Senator Harkin dusted off their old failed FTT bills and the same failure seems certain already with a tiny number of co-sponsors. The U.S. position at the G-20 was consistent. No FTT but rather Obama's bank levy on liabilities - not transactions. It's pretty clear now that taxing transactions won't work, as transactions will disappear, either to tax-free jurisdictions, or they will disappear all together. FTT will reduce tax receipts through economic contraction and job losses. FTT will hurt the same people who call for it, more than banks. So why do some people and special interest groups still push for FTT, and what do they have in common? FTT pushers are left-leaning Democrats, Socialists, anti-business and anti-finance. They despise and blame traders, hedge funds and banks for the meltdowns and income disparities. They want to penalize financial service providers and redistribute their income to themselves. Hence their name, a Robin Hood Tax. This means FTT pushers are either ignorant of economics - not unusual for the left - or blinded by their own special interest agendas. They are strong on vengeance but weak on credibility.
A FTT type tax was implemented in one of the Nordic countries, I think Sweden. It wiped out their bond trading industry. The volume of futures trading fell by 98% and the options trading market disappeared. They expected 1.5 billion krona in tax, they only raised an average 0f 50 million D) http://en.wikipedia.org/wiki/Financ...s_and_financial_derivatives_.281984_-_1991.29 Swedish tax on equity securities, fixed income securities and financial derivatives (1984 - 1991) In January, 1984, Sweden introduced a 0.5% tax on the purchase or sale of an equity security. Hence a round trip (purchase and sale) transaction resulted in a 1% tax. In July, 1986, the rate was doubled, and 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%. Analyst Marion G. Wrobel prepared a paper for Canadian Government in July, 2006, examining the international experience with financial transaction taxes, and paying particular attention to the Swedish experience.[29] 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.[30] 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.[31] 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.[citation needed]
A tax at such a significant level would make day trading unrealistic. Brokers and Exchanges would take a massive hit in volume, so nett they will probably collect less tax. Let's hope good sense prevails.
make my word-they will implement FTT. i expect it to be in 2012. it will kill the rest of us,who was able to adapt and survive current HFT rape.ALL big "pro's" will be exempt. for those who didn't realize this yet-it's their game, and if you did not noticed it yet-"they" doing everything for last 10 years or so to kick out YOU and general public from stock market...George Carlin once again-"it's a big club..and you ain't in it. " "they" don't want you there. they will trade on both sides your pension plans all day long.once they completely control the markets-you will have no choice but to accept any fees that they will come up with. that's their goal.get this trough your head-it's not their money. traders,bots-they get paid,money managers-they get their salary too. regardless to spreads,liquidity,execution quality or even their performance. give me a reason,why they need you in this game? trade,enjoy the game while it last..cause it will be over soon. for most of us,who trade from home..