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The Transaction Tax Is Harmful
Submitted by Zero Hedge on 12/07/2009 00:03 -0400
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All taxes are bad. I rather have less government and less welfare.
that's what GWB & Co' claimed, as the result the level of inequality is all time high. Because let's face it the wealthier you are, the more able you to take an advantage out of tax cuts.
We need smart government that does not create inefficient & unsustainable expenditures and smart tax legislation that is as fair for all as possible.
there are lots of arguments for and against.
bottom line, the tax would give more money to this gov't.
this gov't does not need more money to spend.
this gov't needs to spend less money.
^5
"Smart government" Now there's a young person's oxymoron for ya.
a fine concept indeed, but you wont get it under our present democratic structure where the bias is always to pander to the majority and to the needy and greedy. Starve the beast.
Poorly executed small govt policies do not an ideology make.
Not only that, but many people in this country today are wealthy because of government. Everybody in the defense/spy/prison/homeland "security" industry. Farmers who get price supports. Real estate and building businesses which get free infrastructure to connect their projects to their customers. Even tourist businesses which get advertising subsidies. Doctors, hospital owners, insurance company owners and execs, and the attorneys who sue them, all of whom enjoy a steady stream of patients thanks to Medicare. On and on....
I am for a transaction tax that will be refundable quarterly if an entity makes less than 100 transactions per portfolio/account & or if total assets under the management are below 30 ml.
So where do I sign?
Besides, since the GS & Co will figure out a way to pass such a tax onto their customers, what is the point?
I' tend to believe it's more harmful. If we do want to fairly redistribute WS excesses, we have to eliminate all personal tax deductions for individuals making above 250K with the exemption of Charity deductions.
Cut the baby in half: one basis point tax on all electronic debits originating in the United States.
Use a credit card or an ATM card: one basis point. Wire funds to Switzerland, oops, I mean the Cook Islands: one basis point. Bang out a quick HFT trade: settlement will cost you one basis point.
Pay cash: no basis points, but your transaction will ensure job security for AML counsel and staff.
Taxes are good, we must support the system.
Ooops I just threw up in my mouth a little.
+1
They never get rid of the taxes once implemented. A poster above mentioned going off the grid. Gold can help there.
There should be no "free lunch". Goldman Sachs makes everything more expensive for everyone in world. No more free lunch. Time to tax the transactions.
Agreed.
And if GS tried to exempt themselves, there would be public outcry. GS is the bad guy and nobody would dare to face voters who are looking for blood by giving GS another gift.
You're kidding yourself if you think GS won't find a way to circumvent.
I would like to come up with something clever to refute your comment, but I am afraid I will have to agree with you. How could this be done? By giving GS an exemption, just like it got with energy trading. At first GS might even play along and show how they are helping to build America. Then Barney Hitler Frank will stick some piece of shit rider on a bill that saying that if a company is "too big to fail" then it will be exempt.
Not only will they find a way to exempt themselves from it, they'll figure out a way to profit from it.
I for one welcome our new squid overlords...resistance is futile!
This depends on implementation so much it is almost impossible to call. Do primary dealers pay the tax? Does government pay it for issuing their obligations? If we invent a new tax, lets use it in an innovative way, not to patch over holes left by the previous ones. I am all for collecting this tax, but i want it to go to a fund of all trading parties, not to some puny government. Yes, in an utopian world where humans act rationally 'for the greater good' it would work. In reality, this would probably just drive speculators away and give the govporate cronies another way of screwing the little guy over. Yea wins but reality still sucks.
there are many reasons pro and con
bottom line is that this is a tax
this govt does not need more money
this govt needs to stop spending money
Transaction tax
Goldman Sachs
The squid must die
Ooh, bet you're wond'rin' why they're caught
Damn those CDOs they just bought
With Jimmy Cayne we knew before
Between the two of us, we took down more
It took them by surprise I must say
When I found out yesterday
Don'tcha know that I
Heard it through the Blankfein
Now we've all submerged with subprime
Oh, oh I heard it through the Blankfein
Now he's surely lost his mind
Money, money--yeah
Money, money--how much longer 'til he does time
May I properly finish a good start of CCR/Fogerty?
Blanky's sentence is:
You just take em out to the swamp,
tie em to a stump
and let the alligators do the rest.
from Brother Charlie Daniels "Simple Man"
Then we put the Mark Pittmans of the world in charge.
Do you really think GS is not going to be exempted?
Of course Goldman Sucks is tax exempt.
GS is a church... The Profit Lloyd Blank-dick said so, remember? God's work? If that ain't a bid for church tax exempt status a la Scientology, I don't know what is...
It will be structured so the big boys don't pay...this is a 'pound the individual investor' tax.
Banning flash trading is a whole seperate issue.
The problem is that the Government will never cancel a tax so dont count on substituting 1 tax with another
Brilliant 100%
No really scrap income taxes and have a transaction tax.
I know who would benefit at the end of the day!
I would like to see all taxes repealed - except for two;
A transaction tax, and a tax on net assets.
The idea of taxing production is stupid - only hoarding and shuffling should be taxed.
I also think each state should make everything itself - and import only commodities which it doesn't have, and idea's and knowledge - no imports. Pay for imports using only renewable commodities - do not export anything that is not renewable.
Tell Congress to Block the Trader Tax.
This tax will put most traders out of business!
Sign the Petition here>>http://tinyurl.com/b3lkun
This will put you out of business? <eyeroll>
Consider the Constitutionality of the Federal Reserve
Note (only gold and silver legal tender)and Income
Taxes (only uniform direct taxes).
Millions are dropping out of the grid to thrive.
The Beast will not die until it is starved out of
existence...
Agreed. Scrap the income tax, put in place a Goldman-Sachs tax (Tobin Tax) AND do a solid by killing off $@!*!#*^! DAY TRADERS and similar vermin.
Also, institute a sur tax on the wealthy to pay for the benefits of society that allowed them to become wealthy in the first place (workers are included in societies benefits that are REQUIRED for someone to ever get rich while themselves avoiding actually doing any work themselves...thus they must pay back for their disgusting laziness).
The tobin tax makes no sense as it effects everyone and it would have to be an international tax to be effective.
I believe the windfall tax would be more effective.
As for the sur tax...spoken like a truly misinformed sheep.
I paid over $100k in taxes last year. How much did you pay?
I don't say this to belittle you in any way, I say it to prove a point.
We use the same roads,water/sewer and schools (if I send my kids to private school, I still have to pay for the public school in my town.) On a citizen level, we are the same. Take a look at the following link for a visual rep of who pays for america.
http://www.ritholtz.com/blog/wp-content/uploads/2009/11/MINT-TAXES-R2.png
Reminds me of story I once read:
Suppose that, every day, 10 men go out for dinner and the total bill comes to $100. Suppose, too, that they decide to pay the bill the way we pay our taxes.
This is what happens:
The first four men (the poorest) pay nothing.
The fifth pays $1.
The sixth pays $3.
The seventh pays $7.
The eighth pays $12.
The ninth pays $18.
The tenth man (the richest) pays $59.
The 10 men are happy with the arrangement. But then, one day, the owner of the restaurant throws them a curve. "Since you are all such good customers,"
he says, "I'm going to reduce the cost of your daily meal by $20." Dinner for the 10 now costs just $80.
The group still wants to pay their bill the way we pay our taxes, so the first four men are unaffected. They still eat for free. But what about the other six men - the paying customers? How do they divide the $20 windfall so that everyone gets his "fair share"?
They realize that $20 divided by six is $3.33. But if they subtract that amount from everybody's share, the fifth and sixth men would end up being paid to eat their meals.
So the restaurant owner suggests that it would be fair to reduce each man's bill by roughly the same amount - and he proceeds to work out how much each one should pay.
And so:
The fifth man, like the first four, now pays nothing (a 100% savings).
The sixth now pays $2 instead of $3 (a 33% savings).
The seventh now pays $5 instead of $7 (a 28% savings).
The eighth now pays $9 instead of $12 (a 25% savings).
The ninth now pays $14 instead of $18 (a 22% savings).
The tenth now pays $49 instead of $59 (a 16% savings).
All six of these men are now better off than they were before. And the other four continue to eat for free. But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20," declares the sixth man. He points to the tenth man, "But he got $10!"
"Yeah, that's right," exclaims the fifth man. "I only saved a dollar too. It's unfair that he got 10 times more than me. "
"That's true!" shouts the seventh man. "Why should he get $10 back when I get only $2? The wealthy get all the breaks!"
"Wait a minute!" the first four men yell in unison. "We didn't get anything at all. This system exploits the poor!"
The nine men surround the tenth and beat him up.
The next night, the tenth man doesn't show up for dinner, so the nine sit down and eat without him. But when it comes time to pay the bill, they make a disturbing discovery. They don't have enough money between all of them to cover even half
of the bill.
And that is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction.
Tax them too much, attack them for being wealthy, and they just may stop showing up.
In fact, they might start eating overseas, where the atmosphere is somewhat friendlier.
My point.... I already pay.....
You paid 100K last year...thanks for letting us know some of your docs...now, can you tell us how much you made?
Here's some of my copypasta
The Case for Progressive Taxation By Juan Carlos OrdóñezAdam Smith, the father of capitalism, walked with Jesus in at least one respect: his support for progressive taxation. That’s the principle that taxes should be based on ability to pay.
Echoing Luke Chapter 21’s message that a few pennies from a poor woman's purse costs her more than many pieces of gold from a rich man's horde, Smith wrote in The Wealth of Nations, “It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”
But these days unreasonableness stirs in the minds of some, who complain that the rich pay the lion’s share of all taxes. The proper response to such a complaint is, “that’s how it should be.”
Progressive taxation corresponds with our values. We understand that a dollar in taxes costs a poor person much more than a dollar from a rich person. For a poor family, more money paid in taxes means foregoing food, heating, a car repair or other basic necessities. But for the wealthy, paying more in taxes does not diminish their comfort. They have the ability to pay more.
And yet today you’ll hear some argue that Oregon’s tax system is unfair to Oregon’s wealthiest. They usually cite a statistic that the wealthy pay an outsized share of tax collections.
That’s not surprising, considering how skewed Oregon’s income distribution has become. In 2007, the wealthiest 1 percent of Oregon households took in nearly 19 percent of all income in the state.
But more importantly, that the wealthy pay an outsized share of total income taxes tells us nothing about the fairness of the tax system.
Consider the following hypothetical scenario, a state with three taxpayers: Household A earns $20,000 a year and pays $4,000 in taxes. Household B earns $40,000 and pays $6,000 in taxes. And Household C earns $250,000 and pays $25,000 in taxes.
The unreasonable crowd would complain that the wealthiest third is paying more than two-thirds of all taxes. But when you consider what percentage of their own income each pays, you find that A pays 20%, B pays 15%, and C pays 10% of his income. So when you measure the relative burden on each household, it’s clear that the lowest income earner has the biggest burden. It’s a tax system not based on ability to pay. It’s a tax system that asks more of the poor than of the rich. It violates the principles set forth in Luke and The Wealth of Nations, asking more of the poor and, unreasonably, letting the rich off the hook.
Sadly, while it is hard to deny that a progressive tax system is the only fair tax system, Oregon fails to live up to that standard. True, our state income tax is mildly — “meekly” might be more accurate — progressive. But when all state and local taxes are factored in, the regressive nature of our tax system becomes evident.
Today the poorest fifth of Oregon households — with an average yearly income of about $10,000 — pay about 8.7 percent of their income in state and local taxes combined (income taxes plus excise taxes such as gas and cigarette taxes and property taxes and fees, less the federal offset for itemizers). By contrast, Oregon’s wealthiest 1 percent of families — with average income of over $1 million — pay about 6.2 percent in state and local taxes.
Measures 66 and 67 on the January ballot would nudge Oregon’s overall tax system toward progressivity. If Oregonians vote “yes” to approve these targeted tax increases on corporations and high-income Oregonians, the wealthiest 1 percent would be pushed up slightly, paying 6.6 percent of their income in state and local taxes combined, still less than what the poorest families pay.
Thus, Measures 66 and 67 are a step toward Adam Smith’s more reasonable tax system. They would get us closer to a system that acknowledges the difference between a poor person’s purse and a rich person’s horde, asking the latter to contribute more.
Juan Carlos Ordóñez is the communications director of the Oregon Center for Public Policy.
http://www.ocpp.org/cgi-bin/display.cgi?page=cp0911ProgTaxati
How much did I pay? Answer I don't give out docs.
tj3
Consider that all 10 men work for the same company. They are all smart and hard-working but one guy is exactly 1 IQ point smarter than the others. The others call him 'Boss'.
Boss decides to give himself 50% of all company profits because he is so much smarter than the rest and adds so much more value than the others. He pays 20% of the company profits to his next-in-command. The other 8 get what's left.
Yes, Boss is the smartest. But the additional compensation he has awarded himself is completely out of whack with the additional value he adds.
This is the result of our current economic/corporate structure. This is why the rich get richer and the poor get poorer.
Additional taxation is not the answer - that just gives more money to the demagogues and bureaucrats who are good at squandering and not much else.
The solution is reform of corporate legal structures to narrow the wealth and income gap between the rich and poor.
Nice analogy, but reality is as follows:
A meal costs 2 dollars and everyone must pay 2 dollars to eat. I call this captialism. You're an overacheiver (or you were born with a golden spoon) and you decide to pay 10 dollars to eat.
Some people cannot afford 2 dollars to eat.
In the good old days, the poor would form mobs and take all of your money and eat. Today, the government takes 1/3rd of your dollars and gives it to the poor so they don't form a mob and take all of your money.
That's the value of taxation.
There would be many less "poor" if we had s strong system of property rights, as they would work and contribute... look at most riots/revolutions in history (the kind that you think justify taxation)... they came about in a context of HEAVY government intervention.... so your reasoning is flawed.
just do the tax. We should not think about things too much. More doing and less discussing. Think about it, every time we examine, debate, discuss and analyze these kind of things, they always flop. Just skip the whole first step. Then, if it flops, we can all say that at least we didn't waste too much time on it. But maybe it won't flop, then we can say we improved productivity.
Excellent! An in depth description of the legislative process in just a few sentences.
Indeed, just do it. They can accept more bribes in the future when the special interests seek to "adjust" the law. Revenue maximization and such.
"What luck for rulers that men do not think." Adolf Hitler
We could just save time if the gov't just withheld 100% of incomes and redistributed, to those most in need, what was left over after the cost of smart-bombing weddings in countries our citizens can't find on clearly marked maps in their first language.
what we really need is an attempted transaction tax.
Transaction hijacker tax?
Des pissenlits par la racine! A fake transaction tax would root out flash and high-frequency trading schemes designed solely to milk/trick the stock exchange system and hold-up the investor class. The highway robbery and the false bid or ask tax would cancel, since once it became unprofitable the scum would melt back into the broth.
For example, two cancellations in ten seconds would generate a five cent per 100 share tax. Game Over.
Yes - it would.
It would also stop most trading.
People do not post limit orders aggressively (i.e. with small bid/ask spreads) if they are unable to quickly and cheaply cancel those orders when market conditions have changed.
There would still be limit orders posted to the books, but they would be posted with wide enough spreads to cover the added risk of the markets moving against the orders, which means that they would be posted with relatively large spreads.... and most trading would cease.
It's not people. It is computers for which time is so essential they have to be placed as close as possible to the exchange. Ie decisions generated and cancelled in 100ths of seconds.
As all the big banks all play, presumably somebody else pays. Most likely those who do not hold or sell positions for three seconds If it can be made useless for the banks to play, maybe it would be one less use of capital, and one less reason for leverage.
When positions are held for seconds (or even hours), leverage is not really needed.
You can turn over a portfolio of billions of dollars daily with trivial amounts of capital, so you may hate HFT but it can't be due to the high leverage employed.
Careless Whisper - BRILLIANT!!! +100
ROFL, yes that would hit GS where it really hurts!
Are you kidding? This will only hurt the little guy. The big players make loop holes and driving out the little guys will pay for their loop hole costs.
I hope that is tongue in cheek
To me this would be smoot hawley part deux. I know my reaction both for philosophical and practical reason would be to move all my investing capital abroad. Opportunities in Canada, Australia and others would start looking really good.
That giant sucking sound you would hear would be capital flight out of the US. If you rightfully hate GS and the bailouts simply call in all the money including the money laundered to GS via AIG and let the chips fall where they may. That sure beats the hell out of kicking the piss out of middle class investors/traders, destroying US based capital, our financial system and the economy with it.