Considering that the problem was caused by securitised property loans and insurance thereon* I would have thought that a tax on property would be more appropriate, oh no of course, that would affect too many voters - better to make the equities markets pay for homeowners greed and stupidity. As I understand it only retail pay and this is indeed why CFD's came into being. FWIW as a Brit my attitude to the London Stock market has always been stick it where the sun don't shine with the Government 0.5% tax - I can and do trade elsewhere - my home market is of no interest. In the history of the human race have we ever had such scum and morons as our representatives? The more cynical might suggest that it is being pushed because it would cause those who manage their own accounts to throw in the towel and escape the tax via exempt Wall St asset managers. Democracy no longer works, just as shareholders theoretically reigning in corporate managements no longer works. *shouldn't the head of credit derivatives at AIG be picking up the tab for this?
It all depends on the condition when the proposed law being discussed in the house and senate. If stocks skyrocketed into hyperspace, while jobles rate still high, then a more aggressive law is surely to be passed. Like 2 weeks ago, that's when this proposal got its highest attention. If the stocks tanked bad, with banks and brokerages showing losses for a quarter or 2, then the proposal will be dumped into the garbage bin. It is all about timing.
volume on low-priced options would go to nil. no one will sell an option for $25 when it costs $20 in tax and $1 in commissions, which means you won't be able to buy said option anymore. hence it won't be possible to hedge stock positions with OOTM options
This is not about redistributing wealth. If this tax goes into effect, the first thing that would happen is the very transactions being taxed would mostly vanish. The revenue government stands to generate, for purposes of redistribution or whatever, is negligible.
That all makes sense. Just what you would expect when the leadership is a bunch of socialist/communist control freaks.
Because we have too many stupid voters in this country who can be easily manipulated by the political system. It's about buying votes with your money. Most people in this country can't even manage their own finances / job. Therefore, they have no place in managing the policies of their nation. I know it's not democratic, but would you allow anyone to be your surgeon or pilot?
They are indeed exempt in the UK, but so are derivatives. The U.S. version was designed to be water-tight though. They called it "the principle of broadest possible applicability". Most of the avoidance techniques proposed here have been covered: there would be no exemptions for OTC instruments (such as CFDs), no ex-country trading exemptions, no offshore exchanges exemptions (which is already the case for <10 year expatriate US citizens BTW), not even market-maker exemptions...(!) But they did in practice have to exclude bonds and forex for some (political) reasons. If you still want to read the blueprint of the socialist attack on the Wall Street, purely for historical reasons (or indeed, recreational and pornographic ones, even though the thing is most likely "as dead as doornail" now, then help yourself to some of our previous posts on the main FTT thread: http://www.elitetrader.com/vb/showthread.php?s=&postid=2719067#post2719067 A few pages earlier you will also find out why $95 bn in tax revenue would be missing anually, based on Baker's publicly disclosed estimates (one from 2000 and one from 2008)... there is also a neat collection of anti-Tobin tax arguments to be saved, because you will be needing them in the future This thing comes out of woodwork with regularity of a financial crisis, so Be Prepared! http://www.elitetrader.com/vb/showthread.php?s=&postid=2715794#post2715794 )
This is close to what I've been telling people ever since Obama got elected. Obama's election was a crystal clear example of the state of education in this country. Any self-respecting, half-educated human who can think for himself could see through the hype and the media fawning to realize that while Barrack is a nice guy, and he means well, he and his ideas are certainly no fit to be running the (formerly?) most powerful country in the world. Obama's election was merely American Idol on a grander stage. And the majority of American's were all played the fool. Sad, sad. It's a shame that American voters won't get the message until the economy, our national security, our currency, and our futures are already too far gone to have any chance to effect reasonable corrections. It'll be too late by then. I hope I own my own sovereign island or Galt's Gulch in the Pacific by then