Lawmakers to Propose Transaction Tax for Financial Firms Modeled on Europe

[dustup]

• Tweet

Its a Global Tax and will be used to.......According to Dr. Stephen Spratt, "the revenues raised could be used for....international development objectives...such as meeting the [ Millennium Development Goals ]." These are eight international development goals that 192 United Nations member states and at least 23 international organizations have agreed (in 2000) to achieve by the year 2015.
************************************************************************************************
Article
Two U.S. lawmakers will introduce measures to impose a transaction tax on financial firms that resembles a proposal released by the European Union.

Senator Tom Harkin, an Iowa Democrat, and Representative Peter DeFazio, an Oregon Democrat, will introduce the bills tomorrow in their respective chambers. The bills will give the United States an increased role in the international debate over a transaction tax, which is likely to be discussed at the Group of 20 summit this week in Cannes, France.

Read More Here: http://www.bloomberg.com/news/2011-11-01/lawmakers-to-propose-transaction-tax-for-financial-firms-modeled-on-europe.html

IMO, this new Tax will not benefit American Citizens in any way..........yet another foreign country welfare ploy to move more wealth from America.....

[ivanm]

This is obviously class warfare.

[johnhp]

This is obviously class warfare.

How so, exactly?

[ivanm]

How so, exactly?

Large financial firms are not owned by peons John, and if the trading costs of those firms are increased by this tax then they will simply pass it on to their customers, among which are some very wealthly people that make their living by trading in the markets.

I am not one of those wealthy customers, but when I bought some foreign stock a few months back there was what appeared to be a transaction tax by the host country.  Such a tax raises the cost of what I buy in the market and effectively lowers the price I receive when I sell it.

I will assume that such a tax can  be deducted from the gain on a trade, so it effectively lowers the amount of taxable gain for federal income tax purposes. The only people that gain from this is the socialistic Chinese army of people that will be needed to enfolrce and collect the tax. 

Who loses, the average American loses because the big guys will effectively pay less federal income tax for the reasons I have just stated.  There are also other ways to soften the impact of such a tax, and it is very simple. You simply hold the security long enough to qualify for a long term gains tax treatment.  I do it when feasible.   Fewer trades, less transaction taxes.  Pretty simple, and even a PHD should be able to master that with the help of a  third grade math book.
 
There are thousands if not millions of trades in the American markets each day, so on the surface this looks like a slick way to stick it to the moneyed class and redistribute some wealth.  I'll bet a buck that the dumb tax, if passed, won't even pay for the cost of administering it, so once again this is a scam intended
to benefit none other than the damned feather merchants in our already bloated bureaucracy. 

This is a favorite Obama tactic for job creation, except that the jobs generate no value. That doofus should have majored in economics or business management insted of community development, aka "how to defraud the taxpayers".

[johnhp]

Large financial firms are not owned by peons John, and if the trading costs of those firms are increased by this tax then they will simply pass it on to their customers, among which are some very wealthly people that make their living by trading in the markets.

I am not one of those wealthy customers, but when I bought some foreign stock a few months back there was what appeared to be a transaction tax by the host country.  Such a tax raises the cost of what I buy in the market and effectively lowers the price I receive when I sell it.

I will assume that such a tax can  be deducted from the gain on a trade, so it effectively lowers the amount of taxable gain for federal income tax purposes. The only people that gain from this is the socialistic Chinese army of people that will be needed to enfolrce and collect the tax. 

Who loses, the average American loses because the big guys will effectively pay less federal income tax for the reasons I have just stated.  There are also other ways to soften the impact of such a tax, and it is very simple. You simply hold the security long enough to qualify for a long term gains tax treatment.  I do it when feasible.   Fewer trades, less transaction taxes.  Pretty simple, and even a PHD should be able to master that with the help of a  third grade math book.
 
There are thousands if not millions of trades in the American markets each day, so on the surface this looks like a slick way to stick it to the moneyed class and redistribute some wealth.  I'll bet a buck that the dumb tax, if passed, won't even pay for the cost of administering it, so once again this is a scam intended
to benefit none other than the damned feather merchants in our already bloated bureaucracy. 

This is a favorite Obama tactic for job creation, except that the jobs generate no value. That doofus should have majored in economics or business management insted of community development, aka "how to defraud the taxpayers".

Understood.  You are just repeating talking points.  That is all you needed to say.

[ivanm]

Understood.  You are just repeating talking points.  That is all you needed to say.

John I speak from personal experience as a small investor and as someone who prepares Schedule D each year for my tax returns. Call it what you will, but it is a fact of life so whether you choose to believe it or not matters not to me.

You ask me for an answer, and I have given you a factual update on the consequences of the proposed tax.  Now if that does not suit you then you have a problem.   I say it is just an underhanded way to slip it to the big boys but I got news for those amatuers in the Congress. Once again, dumb ass, we the little guys will pay this tax twice, once directly when we do such transactions, and once again as taxpayers and consumers when the costs are passed on to us.

Do the math and stfu.

[notoc]

John I speak from personal experience as a small investor and as someone who prepares Schedule D each year for my tax returns ... / ... we the little guys will pay this tax twice, once directly when we do such transactions, and once again as taxpayers and consumers when the costs are passed on to us.

I don't disagree, but have you estimated how much the proposed tax would actually cost you?

I believe from our past conversations that I tend more towards the shorter-termed speculative end of contract dealing than yourself, Ivan. As such any tax on those transactions would have to be factored into my own personal costings of risk/reward and price discovery ... such a tax might actually act as a deterrent to my riskier trading.

Now if I, as a relatively tiny player of the markets, could be deterred from multiple shorting of say securities and currencies ... imagine the effect such a tax might have on the likes of the real market movers making 10s of thousands of speculative trades a day.

Have you considered that there may be an aspect of deterrence towards excessive speculation upon traders, especially computer based auto-traders who can actually have a very negative effect on what you might be holding by way of longer-term stocks and bonds?

Just a thought.

[ivanm]

I don't disagree, but have you estimated how much the proposed tax would actually cost you?

I believe from our past conversations that I tend more towards the shorter-termed speculative end of contract dealing than yourself, Ivan. As such any tax on those transactions would have to be factored into my own personal costings of risk/reward and price discovery ... such a tax might actually act as a deterrent to my riskier trading.

Now if I, as a relatively tiny player of the markets, could be deterred from multiple shorting of say securities and currencies ... imagine the effect such a tax might have on the likes of the real market movers making 10s of thousands of speculative trades a day.

Have you considered that there may be an aspect of deterrence towards excessive speculation upon traders, especially computer based auto-traders who can actually have a very negative effect on what you might be holding by way of longer-term stocks and bonds?

Just a thought.

It appears that the amount of the tax on a trade, some .03 percent or 3 cents on a hundred dollar trade, would be insignificant to me as a small trader becaue I do buy and hold for a given profit objective, normally wanting to make 10 percent on a venture.  It is the principle of the thing, when you look at how the tax is to be used then it is indeed class warfare.

I would much rather have the privilege of giving a personal donation to a country or to an organization in a country, even  if the feds have such an entity on their shit list.  There are a number of deserving countries that need help but with the trait of our foreign policy being biased against certain countries then they will play hell getting any of the tax revenues if the US puts its ugly face in the way.

If our government cannot be even handed with its foreign aid then maybe some donations from some caring citizens might tell certain foreigners that as a people we do care for them but our asshole government does not. Maybe this tax is intended to overcome that problem but I am betting that US reps in the UN will balk if anyone suggests that an Islamic  country like Palestine is desersving of some help.   Our recent withholding of funds from UNESCO because Palestine  qualified for assistance tells us that.

I may sound like I am getting off topic, but the reason why the tax is to be collected needs to be looked at as well as the socialistic mechanism of fleecing the rich to give it to the poor. If the Congress wants to support the UN measures then the fair way to do it is to take the money from the general tax revenues, which gives everyone a chance to contribute.  In fact, an incentive could be given to a taxpayer who wants to give some money to these worthy causes, just like it is being done for domestic donations to charity.

Where is the incentive to give with a mandated tax like that being proposed.  I may be hard headed on this issue, but I would more likely give of my own free will than if I were forced to give by some law.

At present my main donations go to the local American Legion post in hopes they will help keep the struggling post in charter. Tomorrow my wife and I will take our turns selling poppies, which is a way to raise money to help veterans.  The little paper poppies are made by disabled American veterans, and the Legion Auxiliary operates the fund drive each year by placing people in strategic spots around the business commnity to give a poppy in return for a small donation, usually one dollar.  People really support the activity and it makes me proud to have played a small part in the drive.

[johnhp]

John I speak from personal experience as a small investor and as someone who prepares Schedule D each year for my tax returns. Call it what you will, but it is a fact of life so whether you choose to believe it or not matters not to me.

You ask me for an answer, and I have given you a factual update on the consequences of the proposed tax.  Now if that does not suit you then you have a problem.   I say it is just an underhanded way to slip it to the big boys but I got news for those amatuers in the Congress. Once again, dumb ass, we the little guys will pay this tax twice, once directly when we do such transactions, and once again as taxpayers and consumers when the costs are passed on to us.

Do the math and stfu.

No.  You are just repeating talking points.

[notoc]

It is the principle of the thing, when you look at how the tax is to be used then it is indeed class warfare.

I can't find any hard info as to how much revenue the proposed tax would raise nor how it would be used ... where are you getting your figures from?

[johnhp]

I can't find any hard info as to how much revenue the proposed tax would raise nor how it would be used ... where are you getting your figures from?

Talking points.

[ivanm]

No.  You are just repeating talking points.

What do you know about the issue Einstein? Write you opinions on a postage stamp, and when I find my magnifying glassI might take a look at it.

If you had any brains you would stick to the issue at hand and not be showing your lack of them.  You belong in a circus, but stay away from the apes lest they get desperate and educate you on the birds and bees.

[johnhp]

What do you know about the issue Einstein?

i know that the bill will not become law, so harping on it is ridiculous.  But that is what happens when you idiots repeat these talking points and you shit out your politics of outrage.

[notoc]

... but stay away from the apes lest they get desperate and educate you on the birds and bees.

Which reminded me of this little gem:

Monkeys Talk About Religion	Small | Large

[dustup]

i know that the bill will not become law, so harping on it is ridiculous.  But that is what happens when you idiots repeat these talking points and you shit out your politics of outrage.

How are you so certain John

DEFAZIO INTRODUCES LEGISLATION INVOKING WALL STREET 'TRANSACTION TAX'
   
HARKIN TO INTRODUCE SIMILAR LEGISLATION IN THE SENATE NEXT WEEK
 November 03, 2011


WASHINGTON, DC— Representative Peter DeFazio (D-OR), Chairman of the House Subcommittee on Highways and Transit was joined by 22 of his House colleagues today in introducing new legislation that assess a miniscule tax on Wall Street securities transactions.  The money it generates will be used to rebuild Main Street.  The legislation, Let Wall Street Pay for the Restoration of Main Street Act, has powerful support from the economists, Wall Street investors, labor organizations, and consumer groups.

“Our nation continues to be crippled by a struggling economy which has resulted in an astronomical unemployment rate of 10.2%.  The American taxpayers bailed out Wall Street during a crisis brought on by reckless speculation in the financial markets.  This legislation will force Wall Street to do their part and put people displaced by that crisis back to work,” DeFazio said.

“I voted against the absurd bank bailout and the Bush Administration’s cowboy capitalism, markets know best, deregulation at all cost policies.  Our stunning unemployment rate is clearly a result of the failure of those policies.  We cannot wait for the next bubble to pull us out of the recession.  We must invest in our future, our infrastructure, and our middle class now.  This legislation will ensure Wall Street pay for needed investment to get our country back on track,” DeFazio continued........

Harkin intends to introduce similar legislation in the Senate next week.

“It is time to raise revenues, pay the bills and create jobs in America, and the most painless way to do this is by imposing a modest tax on financial transactions,” Senator Harkin said.  “There is no question that Wall Street can easily bear this tax.  Last year, the U.S. taxpayer bailed out Goldman Sachs to the tune of $10 billion.  This year, Goldman Sachs has set aside nearly $17 billion for bonuses.  We need a shift in priorities in this country to ask not what America can do for Wall Street, but ask what Wall Street can do for America.”

The legislation assesses a small securities transaction tax on Wall Street.  . A securities transaction tax is applied to:

    Stock transactions (tax rate will be 1/4 of 1 percent--0.25%),
    Futures contracts to buy or sell a specified commodity of standardized quality at a certain date in the future, at a market determined price (tax rate will be 0.02%)
    Swaps between two firms on certain benefits of one party's financial instrument for those of the other party's financial instrument (tax rate will be 0.02%)
    Credit default swaps where a contract is swapped through a series of payments in exchange for a payoff if a credit instrument (typically a bond or loan) goes into default (fails to pay) (tax rate will be 0.02%)
    And options, which are contracts between a buyer and a seller that gives the buyer the right, but not the obligation, to buy or to sell a particular asset on or before the option's expiration time, at an agreed price (at the rate of the underlying asset)

 

A transaction tax has the support of over 200 economists, including Paul Krugman business leaders like John Bogle, the founder of Vangard, and labor and consumer organizations such as AFL-CIO and Americans for Financial Reform.  It will provide a disincentive for excessive speculation.  Much of the excessive risk on Wall Street is in the form of high-volume short-term speculative trading. The tax could raise approximately $150 billion a year.

To ensure the tax is appropriately targeted to speculators and has no impact on the average investor and pension funds, the tax will be refunded for:

    tax-favored retirement accounts
    mutual funds
    education savings accounts
    health savings accounts
    the first $100,000 of transactions annually that are not already exempted

 

Half the revenue generated by this transaction tax (approximately $75 billion) would be deposited in a Job Creation Reserve to fund the creation of good paying jobs and put Americans back to work rebuilding our nation’s infrastructure.  Each $1 billion of Federal infrastructure investment creates or sustains over 34,000 American jobs and $6.2 billion in economic activity.  The Surface Transportation Authorization Act of 2009, which would will create or sustain over 12.5 million family wage jobs, would be partially funded through this tax.

The second half of the revenue generated by this transaction tax (approximately $75 billion) would be used to directly reduce the deficit.

http://www.defazio.house.gov/index.php?option=com_content&view=article&id=531:defazio-introduces-legislation-invoking-wall-street-transaction-tax&catid=60
****************************************************************

Sarkozy Pledges Fight to Make Financial-Transaction Tax Reality

Nov. 4 (Bloomberg) -- French President Nicolas Sarkozy said Group of 20 nations made progress on a future financial- transaction tax that might be used to finance poverty reduction and help the environment.

“The principle of a tax moved forward to the point that we can discuss how its receipts will be used,” Sarkozy said in his closing remarks at the G-20 summit in the southern French resort of Cannes today. “France will fight for this tax to become a reality. We will not wait for the rest of the world to implement it to start doing it.”