New Financial Transaction Tax Purposed - Page 5 - TigerDroppings.com

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Turbeauxdog
LSU Fan
Member since Aug 2004
5669 posts

re: New Financial Transaction Tax Purposed


And they are all providing liquidity to the market. You still haven't addressed whether you are willing to increase the cost of capital for every public American company.

Ford is trading at $13 and has daily average volume of 35 million shares, this 3 bps clip would cost about 135k per trading day at current levels or about 36 million per year.








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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
33697 posts

re: New Financial Transaction Tax Purposed


quote:

But, again, all this does is keep the markets liquid.


I question whether behavior will actually change with the tax. I doubt it will to any appreciable level and even if it does, I do not think it will affect liquidity to the point it makes raising capital more costly. In fact the article I linked pretty much debunks the notion.






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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
33697 posts

re: New Financial Transaction Tax Purposed


Here.

quote:

Bogle told me that he favors a speculation and derivatives tax precisely because of market changes "in the last quarter century" and the fact that "we've taken almost all the friction out of the system." Dramatic cuts in brokerage commissions, the decimalization of share prices, and narrower bid/ask spreads, along with reduced capital gains taxes are all examples, Bogle says. "Frictional costs are inconsequential now" and "speculation is no longer discouraged," he told me. High frequency trading has also become a real problem. The May 2010 flash crash destabilized the markets and eroded confidence in the system.


The increased cost of capital is a poor arguement IMO.

quote:

Ford is trading at $13 and has daily average volume of 35 million shares, this 3 bps clip would cost about 135k per trading day at current levels or about 36 million per year.



And that will be paid mostly by the large institutional investors who will not change their behavior to any appreciable degree. It will be a .03% hit to their trading margin which I do not thing is a bad think anyway.



This post was edited on 3/25 at 12:38 pm


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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
21107 posts

re: New Financial Transaction Tax Purposed


So you are in favor of making the tax code more complicated? What line of business are you in, if I may ask?





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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
33697 posts

re: New Financial Transaction Tax Purposed


quote:

So you're a crusader against casinos too? Honestly, why do you feel you have the right to tell people if they can gamble with their own money or not?




No. I donated at least $10k to their cause last year.


Oh, and as to the part of you not believing about my "thousands" in brokerage fees, it was DEFINTELY a few thousand. I was trading in and out of the same few stocks 5-10x a day paying a fee on every trade.



This post was edited on 3/25 at 12:43 pm


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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
33697 posts

re: New Financial Transaction Tax Purposed


quote:

What line of business are you in, if I may ask?


International tax. Consulting, planning, structuring, compliance.

quote:

So you are in favor of making the tax code more complicated?




<--- More money in that direction.






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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
21107 posts

re: New Financial Transaction Tax Purposed


quote:

What line of business are you in, if I may ask?




International tax. Consulting, planning, structuring, compliance.


frick you!!!









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Drew Orleans
LSU Fan
Member since Mar 2010
18669 posts

re: New Financial Transaction Tax Purposed


So if I buy $10,000 in apple I am taxed .03% of that?

What if I sell $10,000 in that same stock, is that another .03% I'm taxed?

What if I take that same $10,000 I now have because I sold the stock and buy something else, am I taxed .03% again?






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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
33697 posts

re: New Financial Transaction Tax Purposed


Hey... that's not nice.

I'm actually very helpful and do my best to keep every dollar the government is not entitled to under the Code in the pockets of my clients.

Legally of course.

Most of my expertise is international though. And a lot in real estate structuring of ownership for foreign investors. Something very prevalent and needed in Miami.



This post was edited on 3/25 at 12:53 pm


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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
21107 posts

re: New Financial Transaction Tax Purposed


quote:

What if I take that same $10,000 I now have because I sold the stock and buy something else, am I taxed .03% again?


Yes. Think of it as playing texas holdem at the casino. The casino takes a certain % or a fee each hand. If the same group plays long enough, the casino has all the money...






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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
21107 posts

re: New Financial Transaction Tax Purposed


quote:

I'm actually very helpful and do my best to keep every dollar the government is not entitled to under the Code in the pockets of my clients.


Yeah you're like the mob:

"Hey there are a lot of bad guys in this neighborhood that want to take everything you got. Tell you what, give me just 1% and I'll make sure they don't mess with you. Deal?"







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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
33697 posts

re: New Financial Transaction Tax Purposed


Yeah, $3 per $10,000 transaction.

It is just like a brokerage fee which Russian already noted.

And his $6+ fee is the lowest in the market I am sure. I remember paying $12-$20 with Ameritrade years ago.






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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
33697 posts

re: New Financial Transaction Tax Purposed


quote:

Yeah you're like the mob:

"Hey there are a lot of bad guys in this neighborhood that want to take everything you got. Tell you what, give me just 1% and I'll make sure they don't mess with you. Deal?"




I like this analogy.






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Drew Orleans
LSU Fan
Member since Mar 2010
18669 posts

re: New Financial Transaction Tax Purposed


So why should I have to give them $3? I didn't earn anything on it yet. What is the reasoning behind this?





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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
33697 posts

re: New Financial Transaction Tax Purposed


The reasoning is the Gov is looking for ways to raise revenues.

I do not think this one is all that bad as it is not one that impacts economic growth in any meaningful way. The transaction itself if one that does not add value either (or pretty insignificant value).

I will also note I believe the large institutional traders have a massive advantage over the individual. Speed of execution, preferential trade treatment of an order, etc. They are not supposed to, but they do.

It does not bother me that traders sitting around doing little more than making the same buy/sell order over and over see a hit to their margin. It really is a worthless activity for the most part.



This post was edited on 3/25 at 1:03 pm


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dewster
Maryland Fan
Tennessee
Member since Aug 2006
8995 posts

re: New Financial Transaction Tax Purposed


quote:

I disagree with this however. Frequent trading (day trading) doesn't do anything but move money around from one trader to another based on timing and who guessing right on a daily or even minute by minute basis.


It does more than that. Stock purchases provide liquidity for firms, which is very valuable....and has the side effect of providing incentive for firms with good performing stock.

This tax would be a pretty big mistake....you can have the same flawed opinion as those backing this proposal, but it doesn't make this a good idea.

Aside from economic impact, this could be a double or triple taxing of previously earned income- which we should all be against in principle.



This post was edited on 3/25 at 1:06 pm


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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
33697 posts

re: New Financial Transaction Tax Purposed


quote:

It does more than that. Stock purchases provide liquidity for firms, which is very valuable....and has the side effect of providing incentive for firms with good performing stock.

This tax would be a pretty big mistake.


Again I do not think the impact is meaningful at all. This is just targetting the frequent day trading (for the most part) and it is little more than an increased brokerage fee that:

1. I doubt changes behavior
2. Is mostly borne by institutional day traders like GS






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Drew Orleans
LSU Fan
Member since Mar 2010
18669 posts

re: New Financial Transaction Tax Purposed


I don't care if it is 1 penny on 1,000,000 bucks... Its the principle of the matter. They already taxed that money and have absolutely no right taking additional funds (no matter how small) just because I choose to invest it in the market.





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igoringa
LSU Fan
Tejas
Member since Jun 2007
9533 posts

re: New Financial Transaction Tax Purposed


quote:

I am ok with taxing something that is essentially gambling.


We already tax it like gambling... it is called income tax.

Unless I missed your blackjack transaction tax, I am not sure what you are trying to prove with this analogy






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
80165 posts

re: New Financial Transaction Tax Purposed


quote:

And his $6+ fee is the lowest in the market I am sure.
You are consistently wrong in this thread.

The lowest online trades now are $3.95.






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