Wider spreads and lower volumes (along with the cost-boost via the tax) hurt everyone who uses the markets - investors pay more to get in and out, find it harder to shift size; companies pay a higher cost of capital due to less liquidity. Income from daytraders & speculators disappears, which will offset much if not all of the income tax charged on daytrading gains. Lower participation in the markets reduces tax receipts from capital gains etc. Basically it will probably net lose revenue, and screw the markets into the bargain.
Lol - good luck trusting promises from politicians & governments. Surprisingly enough, they have not yet abolished this tax - and they may never do so.
I have an easy time figuring it out. People used to think the earth was flat - because they had never seen the whole earth or been around it, and they didn't understand any science. The public and politicians do not have any experience of financial markets, they have never traded professionally, and they don't understand any finance or economics. Therefore they don't have a clue what the downsides of this measure might be. That makes them extremely dangerous.
I wonder what's the word at CME about this. It must be scaring shit out of them. Does anybody know anything about it??
you're absolutely right. daytrading gives only liquidity. but if you think about it, they also give alot of taxes. think about it. daytrading is basically a zero sum game, except for dividends, and most people lose their money. price appreciation comes solely from dumping shares at the larger fool who is willing to pay more for them. the people who make money in daytrading, pay income taxes. but that exact money comes only out the pockets of other people who lost money, and that money has already been income taxed. so basically money won is double taxed. if the money comes from dividend, you have dividend tax. and i believe there is also company profit tax already on the money that is used for dividends. so basically daytrading provides a platform that creates more taxes for the government, if i'm correct about this. so if they kill daytrading, it wont necesarily create more taxes in absolute dollar value. what would change is less newbies losing money and less jobs in the financial industry and less liquidity. the first thing is probably a good thing, don't know about the second two. actually, the biggest enemy of the government is the buy and hold investor. they only hold, thus never pay taxes.
there's a real easy reason for it, i learned figting h-1b visa, where they couldnt understand that it would lower wages, drive americans out of work and discourage young people from studying math and science, which has of course happened they couldnt understand the above, because getting big lobbying checks depended on their not understanding it this is an armed robbery from every family in america for a group of very rich people who havent accepted that they made a wrong bet, and it's the little guy's responsibility to make them 'whole' they couldnt care less about the market, once they get their hands on that loot the politicians, care about favilitating the robbery to get their bribes, and hopefully still getting elected, because the little guy is understandably furious - so they need a scapegoat - scapegoats, by definition, are convinient bystanders unfortunately, that's us it's like these bankers saw the burger king 'reverse pickpocketing commercial and thought 'heeeeey, what about a reverse bankrobbery?' the bottom line is, the American citizen is nothing but a chump to Washington. A chump to be fed on by every K street slime who walks into a congressional office with some 'sugar'. When besides the telemarketer bill, have they EVER done something for the good of the citizen in the last 15 years?
All full-tme traders and Hedge Fund Managers should join the only industry PAC, Managed Funds Association: http://www.managedfunds.org/join-mfa.asp They are the ONLY group fighting for us...
I have an account with IB, but that;s because stock transactions are usually more then double the price with an euro broker. there are almost no discount brokers here, but it is slowly changing (with IB getting strong presence here etc.)