Transaction tax: an open letter to Don Bright

Discussion in 'Prop Firms' started by jammy page, Oct 11, 2009.

  1. I have not seen any comments by Don Bright on the proposed 01.-0.25% tax on financial transactions which would of course include stock trades.

    This is surprising because I guess it would wipe out many of his traders, or at least make all of them much less profitable. It seems that the proposed tax would significantly harm the profitability of his business.

    I respect that Don has his reasons for keeping his thoughts to himself and has the right to act as he sees fit at the appropriate time. So if he does not respond to this open letter I will understand.

    Having said that, I would be interested to hear Don's thoughts on this proposed tax. He is recognized by the media (including the WSJ which sometimes cites him) as a key player in this industry. He has access to the media and could possibly give a voice to all of the traders who are threatened by this. WSJ editorial?

    On the other hand, maybe he isn't concerned because he envisions an exemption for brokerage firms which would drive more people to prop trading?

    Finally, I understand that this proposal is just now starting to pick up steam, so the time may not yet be ripe. However, the WSJ has now taken up the topic in its Saturday article.
  2. This proposal is not just now picking up steam. It's been building now for nearly a year. It's been a number of months ago that many of us signed petitions that were delivered to Congress.

    That said, getting an exemption is not going to benefit anyone...don't kid yourself. Yeah, you'd be exempt from the tax, but the volume would be down sharply. You might be able to make something off what remains of the markets, but it won't be anything like it was.

    This proposal should be fought by all participants in the industry, to include Don Bright.

  3. Exactly the point which I wanted to add to my original post but was too late to do so. I would think that in any case Don would be concerned because of the sharply decreased volume and wider spreads that would result.

    My concern is that we can gripe about this as much as we want on ET, but we're really just preaching to the choir. We need a voice that can speak to the outside world.

    Besides the petition, the only other voice for traders on this topic that I have seen is Rev Shark's "American Coalition of Individual Investors" (, although it doesn't seem to have had much support.
  4. jem


    I agree Don has been silent.
    I am sure they are working on some way to be excluded from the tax through some kind of Goldman trick.

    I am sure Don is looking to turn this into a competitive advantage.

    It would make sense that exchange members would get excluded from the tax.

    Don -- if the law gets past and you are exempt will you take me back in?
  5. zdreg


    "It would make sense that exchange members would get excluded from the tax."


    if u want to raise the most money tax the exchange members and charge the non professionals zero.
  6. I'm laboring to understand how getting an exemption to a policy which is utterly destructive to the markets as we know them would be an advantage. If the volume withers up (which it would), what good does it do if you're not paying the tax? I'm not sure which exchanges are actualy left in business if this happens, and Don is going to benefit? Think again.

    I think it works the other way. Everyone works against the tax, they don't position themselves. If the tax passes the opportunities will be elsewhere.

  7. You can't be serious. You're really not trying to think.

    The volume could be cut in half, but with the exemption, trading will be several times more profitable. Institutions will still move money in & out of stocks. The less daytraders & black boxes, the better.
  8. Mikecon


    Don spoke about this in numerous threads. nothing new. Do a search. Most likely nothing will come out of this.
  9. Why is it anyone else's business what Don thinks about this or any other issue? He is an independent individual who has the right to comment or not as he sees fit.

    Crafting and belaboring a thread about his opinion or silence, as if anyone should expect him to speak up, makes no sense.
  10. I've commented several times in the past about this, and nothing has changed from my viewpoint.

    If something this Draconian were to pass, it would almost have to exempt the "liquidity providers" - even in this age of uber-regulation and possible taxes, this type of thing would be outrageous if MM's, BD's etc were affected to this degree. Sure, some possible (more minor) impact might take place, but something as propsed now would be ridiculous.

    As I hear things from GS, I'll pass along what I can.

    All the best,

    #10     Oct 12, 2009