I don't have a problem with your position or what you want, whether I agree with it or not. However I do think it's important to realize that what you are counting on is the same mechanism that created things like TARP, not to mention the conditions that lead to TARP in the first place. Put bluntly, "we" are part of the problem.
Exactly. If politicians were serious about curbing speculation, they'd go after the source of leverage - fractional reserve banking. Of course the pussies in Washington don't have the spine to go after Bankers. So they ignore the ROOT of the PROBLEM, and scapegoat the little guy. How many Wallstreet Broker/Dealers/Banks will get exempted, if this transaction tax ever came to be? Answer: All of them. This is a witch hunt. Politicians want to throw retailers under the bus to save their asses. And it will do NOTHING to stem future Bubbles. Which reside in the nature of banking, itself.
No jrlvnv raising taxes shouldnt be our first priority,,cutting spending should be,,but the pols are like crack addicts and cant get anough. This year were gonna spend 700 bil on defense and 500 bil on interest on the debt,,so quite a chunk of the budget already allocated. Until the American people stop being lazy and vote in those who are more fiscally disciplined then nothing will change,,reps and dems spend equally poorly. I would like to see a President set a 10 yr budget in which we pay off all the debt except for 3 trillion which can be used as a parking place for seniors who buy bonds and mutual funds. We could have a 1% vat on all goods to pay down debts,,give drilling rights on any federal land and we want $10 pr barrel. I want to be tax free twice a decade from federal taxes,,the govt could allow 10 states pr yr starting with who joined the union first and then continue the next year to the next 10, 50 states would take 5 yrs,,and start over again giving every american two years out of 10 to be exempt from federal taxes, including ss tax.
You're on the right track, but you're too low. The lowest proposal that i have seen so far is .1%. This is the one they have discussed on CNBC. The highest I have seen is .25%. So at .1% on $53,500, we're talking about $53.50 to buy, and $53.50 to sell. In other words, to make a complete trade would be $107.00. That's 2 points. Now assume you make let's say 3 of those trades per day. That's $321.00 per day. In other words, you gotta make 6 points to break even, BEFORE commission. If the rate were .25%, we're talking $267.50 per round turn trade. Make 3 of those per day and you're looking at $802.50. How many guys here are making 16 handles a day on one contract? Effectively, any of these taxes ends the trading business. Period. With that, brokers like IB for instance are going to either go out of business, or have to significantly raise commissions on the long term investors remaining. Expect volume to plummet. Expect software companies to go broke. Etc Etc. Finally, spreads should widen significantly costing long term investors even more money than just the transaction tax, and increasing volatility. And IPOs have to be priced lower, increasing the cost of capital to new ventures, in order to attract investors facing higher transaction costs and lower liquidity. Make no mistake, the transaction tax will be the ultimate in stupidity. Yet don't think it can't happen...look at what has already happened. OldTrader
+1 oldtrader well said This would wipe out daytrading, and a lot of swingtrading as we know it. Let's hope it doesn't pass. -k
The Medical lobbyists are stronger than the Financial lobbyists ? http://www.nytimes.com/2009/10/11/health/policy/11cost.html?_r=1&hp And the CFTC ? Guess what ....no real changes with regards to derivatives either.....commissions and spreads too lucrative.... http://www.bloomberg.com/apps/news?pid=20601109&sid=a3CxbMYYXpt8 Too bad there are not puts and calls on the liklihood of passage.... The Obam Admin....appears to be neutered.... And Harvard Queen Summers cannot add or subtract..... http://www.bloomberg.com/apps/news?pid=20603037&sid=awkCb_.i0w4s Econ up = business units income up , debt down Econ down = business units income down, debt up Summers cannot see this.... DE Shaw is dear to the pocketbook of Summers as well....
I don't think your assumption is correct. They do intend to tax on value of every transaction, not the profit therof. Here's a quote directly from the article in the WSJ that has everyone so upset: "This week, the left-leaning Economic Policy Institute floated the idea of a national transaction tax that would raise $100 billion to $150 billion a year. The tax, at a rate of 0.1% to 0.25% of the value of the trade, would be levied on all financial transactions such as stock trades" http://online.wsj.com/article/SB125512957855977163.html If it was based on profit, then that's fine. But since it is based on value, I could no longer trade. This bill would eliminate a lot of discount brokerage firms etc etc. And just like Sweden, their rosy estimates of all the money they expect to raise will not come to fruition. I understand the hatred for Wall Street. But why hurt the small retail trader who had nothing to do with it?