Transaction Tax idea still not dead

Discussion in 'Trading' started by seasideheights, Oct 25, 2008.

  1. He said the United States abandoned transaction taxes after World War II but now has a chance to reinstate the tax.

    "That is how you get money to build real things from the paper economy to the public works," said the five-time presidential candidate.

    He said that he and others will push Congress when it is back in session to make the speculators pay for their own bailout.


    http://www.denverpost.com/news/ci_10795774
     
  2. Well then forget liquidity and forget long term steady trends.
     
  3. The chance is as slim as he'd become president.
     
  4. Another "Greenspan" type.....

    Educated far beyond his intelligence....

    This guy is a wanabe has been....which is now becoming a blended aging fool.........like an old dirty sock ...left in an abandoned apartment closet....
     
  5. Let's truly hope that this is the case. But, with all this shit going on, any insane laws could be created.

    Sometimes, all logic is being tossed out of the window.
     
  6. Luckily it's only Ralph Nader so it won't amount to a hill of beans.

    I have to admit I really admired Nader's Raiders back in the day as well as his seminal book "Unsafe At Any Speed".

    They were kicking asses and waking people up to real issues of product safety an govt/corporate corruption back in the 70's and 80's.
     
  7. Well...look at it this way....

    Most of the money is invested in mutual/hedge funds.....

    A transaction tax would mean that there could be no active styles of management....in that the gap would go negative from performance in stocks versus bonds....and thus no further need for stocks as a vehicle....

    What could happen is to impose a 2% tax or something like this....but this is also not logical because it is simply passed on.....

    Also...a transaction tax on stocks is not where the crime took place....therefore the wrong asset class is being punished.....

    What do stocks have to do with the mostly unregulated instruments that were causal ?

    Also, if politics got stupid enough...then trading will shift to other jurisdictions....along with the tax base and capital raising.....

    Companies like BATS are the future.....Just look at how fast they entered the market versus the NYSE.....They will do the same in Europe......

    It seems that the arguments are too clear....and that not too much intelligence is needed......

    However, direct access trading is here to stay....and because of electronic trading, transaction costs will go down to nothing.....

    Also....indexing stocks only makes since when there are a lot of entities trying to outperform the index....Otherwise...the index would have to become more like a bond having to pay competitive interest....

    This is why the head of Vanguard is such an idiot...he is criticizing active management...when it is active management that has enabled him to
    have the product that he has....
     
  8. transaction taxes already exist in certain other countries such as the UK for example. There is "stamp duty" on every share traded which is just a tax.

    I'm not sure who is exempted (I think exchange members and FSA regulated persons are but not sure).

    You'll notice that as deep and liquid as the UK equity markets are, there are no independent prop traders or independent full time high frequency stock traders there. The ones that do trade, trade futures, US markets and CFDs. The tax on trades makes it an unviable business.

    Contracts for difference are a horrible substitute for stocks. Lets hope they don't destroy trading here.
     
  9. If a tax happens. amtd,etrade,fidelity,schwab and 100's of other firms are out of business overnight. heck it will raise the cost of mutual funds huge to all americans. ALSO MORE IMPORTANTLY IT HASN'T STOPPED OTHER MARKETS WITH TRANSACTION TAXES LIKE
    INDIA OR LONDON FROM FALLING AS MUCH OR MORE THAN US. I predict vol would fall 50-70% overnight if they instituted such a tax. Heck just think of the millions of stock brokers and financial advisors affected. if anything they would raise the capital gains tax. EVEN MANY COUNTRIES THAT HAVE TRANSACTION TAXES HAVE NO CAPITAL GAINS TAXES LIKE GERMANY AND JAPAN I BELIEVE SO THAT WOULD CAUSE THE MILLIONS OF FOREIGN INVESTORS TO FLEE
     
  10. Yeah...for many years WS made a fantastic amount of money for just transferring a name on shares of securities....

    What used to cost a few hundred dollars....now cost 20 cents....

    Now look at what WS just did.....they used a supposedly safe sounding instrument in an unregulated way...whereby they could do the markups anyway that they pleased....and value them anyway that they pleased....paying themselves lots of fake money....

    What the the old time brokers will not want in Europe is to see their business going to firms like BATS....

    Well, BATS has already started....and the same thing that happened in the US will happen in Europe and Asia....because efficiency will win every time....

    If a tax is imposed ....volatility will increase by a like amount....and the cost of trading would veer away from efficiency......

    So...it is the old guard versus the new....
    .............................................

    The bottom line is that a new, unfettered world wide stock exchange should emerge and be protected against inefficiencies....because the purpose of stock is to provide non interest bearing non obligatory debt....the most efficient capital in the world....
    ................................................

    To correct the WS issues....this is not complicated....ALL INSTRUMENTS MUST TRADE ON AN OPEN EXCHANGE....with limited leverage.....
    ................................................

    However this is the problem with politics....it was also politics that caused easy money in housing.....and traded chips for the rightaway.....

    This is why the two party system needs to be eliminated and replaced by township governance....
     
    #10     Oct 25, 2008