For those of you who know how to do numbers, what rate would a transaction based on revenue tax need to be to be revenue neutral? Talk about a sales tax, this would be a tax system where the seller pays all the taxes at the time of transaction. For instance at 1% if you sold a car for $5,000 you woud pay 1% or $50 transaction tax. Not bad for those of us that rarely sell cars, and the seller paid more when he sold it to you new. But for a trader who just sold 100 shares at 50 that 1% or $50 would destroy you. Not bad if you bought at 5 and sold at 50 and the only tax, no cap gains, no income tax, no other tax. And you couldn't exempt the market because then everybody would just keep all their money in the market and withdraw it tax free. So what would the flat rate on all transactions, everything from selling a car to selling a house to selling a mutual fund or the stock you bought a few hours ago, based on the gross need to be to stay at least revenue neutral?
I guess now that I think about it, it's just a national sales tax, but a sales tax on everything, no exemptions, even medicine and food, but it's more like a vat because every transaction that took place long before the retail sale would also be taxed at the same flat rate. It seems to me the rate would be almost unnoticable to anyone except those trading on margin. And remember, there would be no cap gains or income tax. But you would pay the tax everytime you close a poaition. That's a lot every day just on the NYSE. To clarify, the seller pays the tax. So your account would only be assesed the tax when you sell.
I mean we are talking about a lot of transactions. Even an employer would pay the same flat rate when he pays his emplyees based on their pay. How low of a rate could we go if every transaction was taxed at the same rate?
And here's one even you Trump supporters will like. If you sell something to the USA, you must pay the US flat rate trasnsaction tax before the product can be imported. Keep in mind we are talking about a rate of less than 1%.
High frequency trading siphons money from individual traders and investor to the firms that can afford big computers. It is a gimmick we could do without.
I'm not trying to shut down anybody. Oh, here's another one. All the money offshore can be returned to USA. All you need to do is pay the transaction tax.
a raise would be a raise on everybody and it can only go higher very incrementally because it would affect every transaction. The idea is to spread the pain and keep the IRS out of the rest of your business.