1 edit | reply to amigo_boy
Obama's Jobs Tour a PR stunt - don't expect jobs »www.youtube.com/watch?v=SahVL0SJd7M
No small business people in jobs summit. Only union leaders; gov't flunkies; CEOs of big companies(like Google's Schmidt); and academics.
The group that creates jobs are small businessmen(which all admit) were sadly absent. |
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| There is a bill floating around that would tax Wall Street trading to get the remaining unpaid TARP money back. HR 1068.
I think it's interesting because we had a transaction tax on Wall Street between 1914 and 1964. I've read that Britain has one.
The proposal says it would end when the bailout money is recovered. The author of the bill says he wants to amend it to exclude the first $100k annual trade activity so it won't hurt the average 401k investor, buy-and-hold types, etc.
It was proposed due to Wall Street fighting regulation of their practices (which amplified the crisis). But, now with a shortage of funds for jobs creation, re-training, etc., it looks like it could have merit.
Personally, it bothers me how quickly they came up with $700 billion plus all the Fed Reserve money to prop up treasuries and buy mortgages (to create liquidity). But, now, with millions unemployed largely due to Wall Street (and with Wall Street largely unharmed and back to its old tricks) we're told there's no money to put toward unemployment.
We ought to tax the heck out of Wall Street to pay for the damage caused to employment.
Mark |
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| said by amigo_boy:There is a bill floating around that would tax Wall Street trading to get the remaining unpaid TARP money back. HR 1068. I doubt this is going anywhere. It was submitted on Feb 13,2009 and referred to House Ways & Means Committee. And there it has sat with no action at all since then.
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| said by fAcEtIOUs:I doubt this is going anywhere. It was submitted on Feb 13,2009 and referred to House Ways & Means Committee. And there it has sat with no action at all since then. That's what I thought too. But, it's been in the news again recently. For example, this is where the author says he's willing to add a $100k exclusion.
What caused it to come back to life is how we've been told there's no money for social stimulus (after we tapped ourselves out with financial-market stimulus). That logically leads to the question of why we're not forcing the payback and using it for other things?
I think it makes a lot of sense only because Wall Street has fought regulation. This law would remain on the books so that, when (not if) we have to bail out Wall Street again, there will automatically have to repay the bailout. It would constantly kick in to repay bailout money. Then sunset when it's paid.
Mark |
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| reply to amigo_boy
As an investor, I am not in favor of a transaction tax. A transaction tax would also hurt 401k holders. The government should not discourage investment. We already have capital gains. |
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| said by hoyleysox:As an investor, I am not in favor of a transaction tax. A transaction tax would also hurt 401k holders. The government should not discourage investment. We already have capital gains. I don't believe a 1/10th percent transaction tax for 4-5 years would discourage investment significantly. As mentioned earlier, we had such a tax between 1914 and 1964. Looking at a chart of S&P 500 there was no noticeable positive effect on the elimination of the tax in 1964.
If it were me, I would probably exclude 401k and IRA trades as well as the first $100k in taxable trades. I think that would help target the transaction tax on the high-volume traders which it intends.
The problem is:
1. Wall Street is opposing regulation. I understand it's wrong to force traders to pay for Wall Street's bailout. But, it's even more wrong to force everyone to pay who don't even participate in the market.
The transaction tax would apply to those who participate the most.
2. Those who oppose the transaction tax tend to be the same people who oppose regulation.
That means they basically espouse the same worldview which Greenspan did. "Markets get it right." But, "when they don't, and we have to spend billions of dollars to rescue markets, and the top-of-food-chain beneficiaries, it's worth it" (And, "let's not put those two thoughts together in the same sentence.").
Mark |
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| I don't believe a 1/10th percent transaction tax for 4-5 years would discourage investment significantly. As mentioned earlier, we had such a tax between 1914 and 1964. Looking at a chart of S&P 500 there was no noticeable positive effect on the elimination of the tax in 1964.
If it were me, I would probably exclude 401k and IRA trades as well as the first $100k in taxable trades. I think that would help target the transaction tax on the high-volume traders which it intends.
One argument against transaction tax:
If the tax would not be 'noticeable', meaning not expected to change behavior, then why have the tax in the first place?
My second argument that I thought of:
That .1% tax would add up. Traders would pay it when they buy and when they sell. It would hurt the strategy of incrementally increasing or decreasing positions as prices adjust and be an incentive to go 'all in' or out with each trade.
Dividend reinvestments are technically a transaction that could be affected.
Assuming an investor expects 7.5% return, that .1% of the total trade would still assign a significant amount of profit to the government.
It would also provide an incentive for multinationals to trade on foreign stock exchanges to avoid that tax.
Though I appreciate that my 401k and low-volume of trades would not be subject to the transaction tax and that the tax amount seems low, I think there would be other unforseen and negative implications. |
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| said by hoyleysox:If the tax would not be 'noticeable', meaning not expected to change behavior, then why have the tax in the first place? Read the law. It says that it's only purpose is to repay the TARP funds (which haven't been repaid yet). The tax stops when the funds are repaid. But, it remains on the books and could be used again the next time we have to intervene (which is a matter of "when," not "if.").
The response at this point should be, "but traders didn't cause the meltdown." I know. I agree. But, they're closer to the market (and presumably benefit more from it due to their use of it, otherwise they wouldn't use it) than the general population. So, it's "less wrong" to impact them than everyone.
I don't really like it. I wish we didn't have to have taxes on anything and we'd all sing the Coca-Cola song. But...
said by hoyleysox:That .1% tax would add up. Traders would pay it when they buy and when they sell. It would hurt the strategy of incrementally increasing or decreasing positions as prices adjust and be an incentive to go 'all in' or out with each trade. Actually, if you read the law, the transaction tax is applied to trading facilities. Not to traders. It would be up to them to pass it on, or absorb it as part of their operations (such as Goldman's $21 billion bonus pool).
I agree with you. I wish we didn't have to have it. But, millions are unemployed and all of a sudden Obama's worried about bankrupting the country. So, he's turned stimulus-light. If we can get that TARP money back, that would be a little more to use to help out the people who, unlike Goldman, haven't returned to their former glory.
You're right that if the tax is passed on to traders it should inhibit the practice "scalping." Round-trip trades that profit from small movements in price. Often highly leveraged to compound the fractional profit.
I don't know if that would be good or bad. It could decrease liquidity, increasing the bid/ask spread. I don't know if that's necessarily bad either (except to the scalper). It just changes the calculus.
Like I said, we didn't see any volume difference in 1964 when a transaction tax was lifted. We didn't have day traders then. But, it should have had some effect (if we're to believe it will have a significant effect today).
It's really a backdoor attempt to make the big Wall Street firms repay TARP by taxing their "quant" platforms which engage in high-speed trading.
Mark |
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| Correct me if I am wrong, but I believe that almost all of the companies that received tarp funds have paid it back or announced that they will pay it back soon, exceptions being citigroup, GM and Chrystler, who apparently cannot afford to pay it back and would be weakened further by a transaction tax.
A transaction tax would not be cataclysmic and its effects on investor behavior would be subtle, but I do not think it would bring a positive effect, aside from increasing tax revenue. If the goal is simply to increase tax revenue, I do not see how it would be preferrable to raising income tax or capital gains tax, which I am not in favor of either.
I do not consider the discouragement of speculative investments to be a worthy goal - too much of our economy is based on consumption, not investment. |
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| said by hoyleysox:Correct me if I am wrong, but I believe that almost all of the companies that received tarp funds have paid it back or announced that they will pay it back soon I don't know. I googled and found this article from August:
quote:
The bottom line: Taxpayers put $204.4 billion into the banks through CPP and have received $70.2 billion in principal, ... Today, 633 banks still owe the Treasury $134.2 billion.
-- »www.slate.com/id/2226517/
Maybe you can search for more recent info.
Either way, if there's not much left to repay, then the transaction tax wouldn't last long.
Mark |
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patcat88
join:2002-04-05
Jamaica, NY
kudos:1 | reply to hoyleysox
said by hoyleysox:As an investor, I am not in favor of a transaction tax. A transaction tax would also hurt 401k holders. The government should not discourage investment. We already have capital gains. Investment in what? Slot machines? |
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patcat88
join:2002-04-05
Jamaica, NY
kudos:1 | reply to hoyleysox
said by hoyleysox:Correct me if I am wrong, but I believe that almost all of the companies that received tarp funds have paid it back or announced that they will pay it back soon, exceptions being citigroup, GM and Chrystler, who apparently cannot afford to pay it back and would be weakened further by a transaction tax. Thats only of the "major" firms as defined by MSM. |
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| reply to patcat88
said by patcat88:said by hoyleysox:As an investor, I am not in favor of a transaction tax. A transaction tax would also hurt 401k holders. The government should not discourage investment. We already have capital gains. Investment in what? Slot machines? lol. stock and coffee beans! |
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 ElcabongCuba SI, Castro NO
join:2000-03-09
Philadelphia, PA | reply to fAcEtIOUs
That's all this president is: smoke and mirrors. The biggest bullshit act of this century thus far is only talk, no action or transparency.
This administration has the least amount of people recruited from the private sector than any other president's administration. They have people who no nothing about creating jobs or keeping businesses going. They've mostly come from public (ahem) service jobs which do not require success to keep the afloat. Here you have imbeciles trying to tell business people how to manage their business. This administration will go down as one of the biggest failures in American history.
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| said by Elcabong:They've mostly come from public (ahem) service jobs which do not require success to keep the afloat. Wow. Coming from the political persuasion that nominated Senator John McCain -- who's spent the majority of his life in public service jobs. (23 years military + 27 years elected office.).
I'm not thrilled with everything about President Obama's administration. But, c'mon. There's not that much difference between him and McCain except who the rhetoric is designed for.
Mark |
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1 edit | But I can respect McCain for his military service, but not so much for obama's community organizing, or his state legislature record. Or his Senate record for that matter. |
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| said by Austinloop:But I can respect McCain for his military service, but not so much for obama's community organizing, or his state legislature record. Or his Senate record for that matter. Well, that's different than just condemning people for having a career in public service. Now we're talking about how some people prefer some public service (or positions they took). That's a political issue having little to do with the complaint about not running a business.
Mark |
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