You still have the option of trading the foreign markets. If you're a boring ol' stock trader, you could trade many US stocks that are listed elsewhere in the world. If you happen to trade futures and commodities, most of the products you trade can also be found on foreign exchanges. As a last resort, you can always opt to become an ex-pat or move out of US altogether.
Several things come to mind with this sort of tax... Domestic exchanges would lose a TON of business to foreign rivals. Many more traders/hedge funds would shift their business overseas. Possibly create strong overseas exchanges/ECNs that could potentially put US based trading out of business. End result would be less taxes collected than anticipated, less liquidity for those left investing. A further competitive disadvantage to doing business in US. Introduction of other "securities" to replace the actual stocks ala UK system with CFD's. Less foreign capital being invested in US due to more government siphoning thru taxes. *Personally*, I'm shifting 1/2 my trading to overseas markets, especially Europe. I don't get too excited over Asian markets yet.
It won't effect any business making less than $200k a year. In fact, I believe the president elect was talking about eliminating short term and long term gains from this demographic. From that, you should be reasonably sure that to be better off you incorporate a small business for this benefit. That would be how I'd avoid this tax, and how a lot of people would, too.
Since CME, NYSE, and various other exchanges have already acquired or merged with other international exchanges, trading in the overseas arena shouldn't be too difficult. Let's just hope the government wouldn't punish traders for doing just that. BTW should the transfer tax be implemented, there's no question that liquidity would completely dry up in the US market and that will, in turn, drive up prices for just about everything. Perhaps this will serve as a catalyst for the monster inflation we all fear.
commissions on stocks in london and some european exchanges are too high for prop trading. some of these prop trading or professional traders trade the markets like an arcade game with number of shares and volume. since 70% of volume is automated programs. it'll just reduce volume and people just get real jobs and position trade instead of daytrading volume of large NYSE stocks.
the useless brokerages and exchanges would receive a lot less business on fees and commissions. remember estimated 80% or more of their retail clients lose money trading. people just quit and get real jobs since it's not feasible if trading cost is too high for daytrading
they are talking about deep pocket speculators like hedge funds that have so much money they can move markets. are they taxing on value of trade or number shares?
I agree. And right now, with IRA's + 401K's so beaten up, any political attempt to tax the stock market further would be VERY unpopular. My guess is this one will fizzle, along with a lot of other crap that is being introduced due to pretty soon having a Dem Pres and Congress. I can't wait until Obama is in office - not because I think he is the man, but because I am sick of all the lies and distorted "facts" that the left-wing media spin-machine pumps out to blame Bush for all of the world's ills, when it fact it was mostly left-side government intervention a decade ago that caused all of this mess and let the terror situation develop in the first place (Clinton). Once the Obam-ster is in office, the truth will come out the rest of the way as his own party turns on him and there is no one else for the Dems to blame for their mathematically deficient ideas about taxation and redistibuting wealth.
If this thing passes, and you yankees start trading the european futures market, the after hours would have PLENTY of liquidity so that would not be a problem at all
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