About 10 years ago it was estimated that one to two million people made their living trading stocks. I am vague about the details. With all the layoffs going on, I am sure the number of people presently attempting to make a living in the market is huge. Lawmakers do not realize what a huge impact this tax will have on the livelihood of traders. This tax will have the effect of adding a couple of percentage points on the unemployment figures. Trading has been my livelihood for the last 15 years. I may have to re-enter the job market if the transaction costs make trading uneconomical.
"According to Thea Lee, policy director at the AFL-CIO, âIt would have two benefits, raise a lot of revenue and discourage speculative financial activity. The big disadvantage of most taxes is that they discourage some really productive activity,â she said. âThis would discourage numerous financial transactions. People flip their assets several times in an hour or a day. They make money but does it really add to the productive base of the United States?â" call thea lea at 202 637 5000
A union official should be the last person to comment on what is considered "productive." They actively defend and promote the least productive members of the workforce while demonizing the most productive.
I would argue that it adds to the productivity of the US because if someone buys company's stock he gives money to the company for investment and expansion of it's business. This is investment 101. The guy should read investment for dummies. On the side note what amount of taxes he thinks the government will collect if people would buy and sell stocks once in 10 years.
when u buy stock on nasdaq or on the exchange the co doesn't receive money. only in an ipo or secondary does the co. receive some of the money.
If "speculative activity" is such a significant problem, then it must constitute a significant portion of daily volume. So if those transactions are discouraged via taxation, where's the revenue gonna come from?
this is the problem with static tax analysis. they assume that people's behavior is unchanged since no matter what they say are onltreally interested in raising revenue and are clueless that people will avoid these gov't revenue enhancing activities
That's where comes my second part of reasoning: if people buy stocks at ipo and sell them in 10 years so where the tax revenues would come from? They wouldn't have a choice but to tax the positions. The higher is capital turnover the higher are the government's revenues. Everybody wins.
When you start discussing people's "productive value" you are on a very slippery slope. If we taxed people based on the their "productive value" then union officials and politicians would be taxed at the highest levels. Do they really want to have that discussion?