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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
31774 posts

re: New Financial Transaction Tax Purposed


quote:

Would you be OK with a special tax on ex-Auburn living in Miami tax?


I imagine that would sorta piss me off honestly. Might tell the gov to frick off.



This post was edited on 3/25 at 1:49 pm


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Taxing Authority
LSU Fan
Houston
Member since Feb 2010
21101 posts

re: New Financial Transaction Tax Purposed


quote:

I imagine that would sorta piss me off honestly. Might tell the gov to frick off.
So "the government needs more money" is a good enough reason to tax "someone else" but not you?

Typical. Its always easy to advocate for higher taxes... As long as they don't have to pay them.






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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
31774 posts

re: New Financial Transaction Tax Purposed


quote:

So "the government needs more money" is a good enough reason to tax "someone else" but not you?


Now you are getting it.

quote:

Typical. Its always easy to advocate for higher taxes... As long as they don't have to pay them.


Such is human nature. Self-interest rules all at the end of the day.






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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
14374 posts

re: New Financial Transaction Tax Purposed


quote:

Win big at a casino and watch them withhold before paying you out and make you fill out the tax form.
Don't even go there with respect to taxes on casinos and gambling. During my 25 years of accounting experience I have been the tax director for the largest privatley owned casino company in the United States. I have forgotten more about casino tax matters, cash transaction reporting and suspicious activity reports than you have ever known. How much tax is taken from someone who wins big at a table game? Zero, because when you cash in chips you may be cashing in less than you bought. So you are wrong about taxes being withheld from all big winners at casinos. Withholding at casinos applies to slots, keno, bingo, pari-mutuel bets (horse racing) and poker tournaments, and the withholding is income tax not a transaction tax.

quote:

Should be very simple and 401(k) already severely restrict short term trading so I really doubt it is an issue.
Your response seems to indicate that you failed to comprehend my post. If the brokerage engages in programmed trading, then it's costs will increase due to transaction taxes on each trade the brokerage makes on its own accounts. This will cut into any profits from programmed trading. If businesses do not pay taxes, but pass the costs of taxes to their customers, then the brokers who also act as custodians of 401(k), and other types of retirement accounts, will naturally pass the additional costs on to their customers. Can you guarantee that the additional costs associated with the transaction tax incurred on trades for the broker's benefit will not be passed to 401(k) type accounts in the form of higher fees? Avoiding direct taxation of transactions made by 401(k) type accounts shouldn't be too difficult since trades are easy enough to identify.

And just what qualifies as a financial transaction? Is the payment of interest by a bank on a savings account a financial transaction? Is a credit card purchase a financial transaction? Does the tax apply to all parties engaged in a transaction? If so, then a credit card purchase could have 3 parties subject to tax, the cardholder making a purchase, the credit card issuer, and the merchant making a sale.






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Taxing Authority
LSU Fan
Houston
Member since Feb 2010
21101 posts

re: New Financial Transaction Tax Purposed


quote:

Self-interest rules all at the end of the day.
That isn't self interest. It's shirking responsibility to others.






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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
31774 posts

re: New Financial Transaction Tax Purposed


quote:

Don't even go there with respect to taxes on casinos and gambling. During my 25 years of accounting experience I have been the tax director for the largest privatley owned casino company in the United States. I have forgotten more about casino tax matters, cash transaction reporting and suspicious activity reports than you have ever known. How much tax is taken from someone who wins big at a table game? Zero, because when you cash in chips you may be cashing in less than you bought. So you are wrong about taxes being withheld from all big winners at casinos. Withholding at casinos applies to slots, keno, bingo, pari-mutuel bets (horse racing) and poker tournaments, and the withholding is income tax not a transaction tax.


I defer to your expertise. And good point about table games.

quote:

Your response seems to indicate that you failed to comprehend my post. If the brokerage engages in programmed trading, then it's costs will increase due to transaction taxes on each trade the brokerage makes on its own accounts. This will cut into any profits from programmed trading. If businesses do not pay taxes, but pass the costs of taxes to their customers, then the brokers who also act as custodians of 401(k), and other types of retirement accounts, will naturally pass the additional costs on to their customers. Can you guarantee that the additional costs associated with the transaction tax incurred on trades for the broker's benefit will not be passed to 401(k) type accounts in the form of higher fees? Avoiding direct taxation of transactions made by 401(k) type accounts shouldn't be too difficult since trades are easy enough to identify.


I understand now. What I read would seem to indicate 401(k)s are not excluded, but rather a dollar for dollar credit is given.

No I can't guarantee brokerage's will not try to raise transaction costs to customers, but most companies tend to other investment options with very low "load costs", so I expect competition will keep things where they are, especially since there should be no additional net cost regarding 401(k)s in the first place.

quote:

And just what qualifies as a financial transaction? Is the payment of interest by a bank on a savings account a financial transaction? Is a credit card purchase a financial transaction? Does the tax apply to all parties engaged in a transaction? If so, then a credit card purchase could have 3 parties subject to tax, the cardholder making a purchase, the credit card issuer, and the merchant making a sale.


Obviously would have to be well defined. Unlike "financial account" for FBARs or "specified foreign financial assets" for 8938 purposes.






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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
14374 posts

re: New Financial Transaction Tax Purposed


quote:

Shouldn't some markets be illiquid?
Doesn't lack of liquidity result in a discount when determining the market value of an asset? Why would you want to depress the value of people's property by reducing the liquidity?






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ironsides
LSU Fan
new york, ny
Member since May 2006
5331 posts

re: New Financial Transaction Tax Purposed


quote:

Doesn't lack of liquidity result in a discount when determining the market value of an asset? Why would you want to depress the value of people's property by reducing the liquidity?


Not a discount, true price discovery. What if all industries had liquidity providers, the chevy volt would be a best selling car!







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NC_Tigah
LSU Fan
Member since Sep 2003
48188 posts
 Online 

re: New Financial Transaction Tax Purposed


quote:

New Financial Transaction Tax Purposed
LINK

Thoughts?

I say yea.
So 43% on STCGs isn't enough?
Taxing investment at a higher rate than income isn't enough?

With state tax considered, the government is taking more than half of my short term profits.
More than half isn't enough?

My money, my investment research, my risk . . . . and the government takes more than 50% of it when I happen to make a profit.
Yet that is not enough.

Incredible






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ironsides
LSU Fan
new york, ny
Member since May 2006
5331 posts

re: New Financial Transaction Tax Purposed


Depends on what your definition of investing is - most stcg is NOT buying company x because it is a worthwhile company to own and the business environment is such that future cash flows should increase the value of the company and/or allow for dividends to be paid back to me.

Most Stcg are equivalent to educated gambling.

In either case the government is going after High frequency traders that hold a stock for less than a day (in some cases less than a minute) which I don't have a problem with - they should have like a new category like mid term capital gains where you don't get penalized as heavily for owning more than 3 months or something.

Dividends should also not be taxed.

Or we could stop meddling with free markets all together, start enforcing fraud, and go to a flat tax but apparently making people that are on the take pay their fair share is wrong....






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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
14374 posts

re: New Financial Transaction Tax Purposed


quote:

Not a discount, true price discovery. What if all industries had liquidity providers, the chevy volt would be a best selling car!
The Chevy Volt does have a liquidity provider, it is Ally Bank. They will assist purchasers by lending them the money to purchase the vehicle. They charge interest to provide you with the asbility to purchase now instead of waiting until you amass cash to pay the purchase price. Despite the liquidity provider the Chevy Volt is not a best seller. It is a crappy product with little demand.

Here is one experts opinion regarding liquidity discounts. LINK






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TerryDawg03
Georgia Fan
Member since Dec 2012
1422 posts

re: New Financial Transaction Tax Purposed


Two fundamental problems:

1) How does the government decide who is speculating versus who is hedging?

2) Behaviors always change when tax rates are changed. Stating that an effective rate change will result in a $ for $ revenue increase is always BS.

This tax is garbage.






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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
14374 posts

re: New Financial Transaction Tax Purposed


I agree. They talk about a 0.03% rate, but the actual rate is 0.06% since there are two parties to the transaction being taxed, and in the linked article the author specifically called for a higher tax rate. So this is just an attempt to sneak the camel's nose under the tent.

What is wrong with speculation that it needs to be discouraged? Why should someone be able to spend money on a yacht with zero chance of recovering the original investment, but not allowed to spend money on a security that has a chance to provide an economic benefit, without the discouragement of a transaction tax? The only reason is the volume of transactions make one more attractive than the other. The tax is not about principles. It is about expedience.






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CptRusty
New Orleans Saints Fan
We are the ones who knock
Member since Aug 2011
3883 posts

re: New Financial Transaction Tax Purposed


quote:

My money, my investment research, my risk . . . . and the government takes more than 50% of it when I happen to make a profit.
Yet that is not enough.


Fair share.






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NC_Tigah
LSU Fan
Member since Sep 2003
48188 posts
 Online 

re: New Financial Transaction Tax Purposed


quote:

Most Stcg are equivalent to educated gambling.
So are LTCGs, Bonds, Treasuries, Real Estate or nearly any other nonconsumable, profit oriented transaction.
quote:

the government is going after High frequency traders
those traders are currently taxed 10% more than they would be if their income originated from salary. If the effort is targeted toward reduced market volatility, reestablishing an uptick rule would be far more effective.






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NC_Tigah
LSU Fan
Member since Sep 2003
48188 posts
 Online 

re: New Financial Transaction Tax Purposed


quote:

Most Stcg are equivalent to educated gambling.
So are LTCGs, Bonds, Treasuries, Real Estate or nearly any other nonconsumable, profit oriented transaction.
quote:

the government is going after High frequency traders
those traders are currently taxed 10% more than they would be if their income originated from salary. If the effort is targeted toward reduced market volatility, reestablishing an uptick rule would be far more effective.






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Catman88
LSU Fan
Baton Rouge, LA
Member since Dec 2004
38778 posts
 Online 

re: New Financial Transaction Tax Purposed


quote:

Essentially it is a small tax on speculation and frequent trading in the equities markets.


How isnt this not already taxed at the income rate of the individual for short sales vs long sales?






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Taxing Authority
LSU Fan
Houston
Member since Feb 2010
21101 posts

re: New Financial Transaction Tax Purposed


quote:

Depends on what your definition of investing is - most stcg is NOT buying company x because it is a worthwhile company to own and the business environment is such that future cash flows should increase the value of the company and/or allow for dividends to be paid back to me.
If one doesn't do due diligence, than sure it's gambling. But that would apply to someone that buys AAPL with the expectation it's going up and never looks at the company's finanicals. Or someone that buys a house with the expectation that it will appreciate in value over the years they own it. Just as much "gambling". The time period of holding is irrelevant.

ETA: NC_Tigah beat me to it!

quote:

Most Stcg are equivalent to educated gambling.
Only for the foolish.

quote:

In either case the government is going after High frequency traders that hold a stock for less than a day
Bull shite. If they were "going after" frequent traders, they would outlaw frequent trades. Not tax it.

You're being manipulated. The government tries to ameliorate it's theft by justifying it as a solution to a perceived immorality.




This post was edited on 3/26 at 12:32 pm


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ironsides
LSU Fan
new york, ny
Member since May 2006
5331 posts

re: New Financial Transaction Tax Purposed


Call it what you want dude, but just because you read a financial statement and hold a stock for more than a day but less than 12 months does not make you an investor. Time period is relevant but we'll have to agree to disagree because we're not going to convince each other, and we're really for the same thing: a fairer tax system that treats people equally as opposed to punishing the successful.





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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
20298 posts
 Online 

re: New Financial Transaction Tax Purposed


quote:

just because you read a financial statement and hold a stock for more than a day but less than 12 months does not make you an investor.


So when does a stock purchase turn from gambling to a true investment, in your eyes?

I think it's extremely obtuse to have a holistic view of stock purchases.






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