Comments on: Taxing Financial Transactions: Good Idea or Not?

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By: Roger

Roger — Tue, 23 Feb 2010 03:51:22 +0000

@Evolution of Wealth: Again, fair enough. I hardly expect that such a tax would be universally popular (hell, even Timothy Geithner (and arguably the Obama administration by extension) opposes the idea: http://www.reuters.com/article/idUSTRE5A611320091108), and at the moment, it’s only in the proposal stages. I’m going to have to do more research into Great Britain and their experiences with a transaction tax on stock trades, to see what sort of effects we might encounter (other than raising significant funds).

As for the American people believing what politicians say…there’s at least worth of posts on that alone, although I think that’s starting to get outside the realm of what I want my blog to cover. I will say that I think there’s significant skepticism (from the opposing political party, if not from party loyalists) that getting any taxes passed without a sizable amount of scrutiny is unlikely.

By: Evolution Of Wealth

Evolution Of Wealth — Tue, 23 Feb 2010 02:12:14 +0000

I have to agree with Evan. I don’t think this will accomplish anything for investors other than increasing costs. The driving force behind this is more money to the government. It’s amazing what they are coming up with to get more money. It’s even more amazing the reasons they pretend to do things. I guess it’s just sad that most Americans believe what they say.
Evolution Of Wealth´s last blog ..Why Your Finanical Planner is Like a Buffet

By: Roger

Roger — Mon, 22 Feb 2010 00:49:56 +0000

@Evan: Now tell me how you really feel No, seriously, I do have my own doubts about the effect (if any) this type of tax would have on market stability and short term trading. I made the point when discussing the effects of this tax, noting that the (stated) desired effect of decreasing trading may or may not actually come to pass. I suppose I should have put the same qualifiers in the statement you quoted.

I also agree that the costs will be passed onto the end consumer, as is the case with every ‘upstream’ tax ever. I’m still inclined to support this tax, even with the inevitable rise in investment costs that will come to pass. While I hope that the politicians get their act together and lower spending, I have a hard time believing they will do so enough to eliminate our current budget deficit. Partially because cleaning up earmarks and other small scale ‘pork’ is difficult if you’re trying to keep the congressmen who put such pork into the budget happy and partially because serious budget cutting requires not only tackling the small, easy to eliminate expenses but also making a sizable cut to some of the big programs, like Social Security, Medicare, and defense spending, which will undoubtedly cause a political firestorm.

There’s always hope that a future administration and/or Congress will have the discipline and willingness to take away spending for the greater good, but barring a sea change in the current political landscape, I see the need for some increased tax revenue to close the gap between what we want to spend and what we are actually taking in through taxes. If this bill does that with a minimum of negative side effects (and possibly some positive ones, like making people a bit less inclined to engage in day trading), I’m still in favor.

By: Evan

Evan — Sun, 21 Feb 2010 22:43:02 +0000

“The goal is to increase the stability of the markets by increasing the costs of buying and selling financial instruments, thus decreasing the volatility of the market (and earning the government a little money on the side).”

That is such Bull Sh!t. This bill would literally do nothing to increase stability of the markets. ZERO. The reason for this bill is simply to raise revenues for a broke government.

Just the CARD Act of 2009 almost every single dime taxed to the brokerage houses will be passed on to you and me. Like Citi is now doing – you’ll start seeing inactivity fees, decreased returns on money markets (if they can get lower lol), etc.

End the new taxes…just stop spending money!
Evan´s last blog ..What is the Middle Class Task Force and Who is on it?