Democrats Back a 'Trading Tax'

Posted by  $  Olduglycarl 2 years, 10 months ago to Economics
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Say Speediest Stock Traders a Threat.

I say...Bad Idea...I think it would destroy market liquidity.
SOURCE URL: http://www.newsmax.com/Newsfront/stock-market-trading-tax/2016/07/03/id/736831/?ns_mail_uid=36258238&ns_mail_job=1676485_07032016&s=al&dkt_nbr=cq5wii9q


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  • Posted by ChuckyBob 2 years, 10 months ago
    First of all, Sanders is proposing it...need I say more? No, but I will anyway. Having a socialist try to regulate capitalist systems is like asking a two-year old to perform brain surgery. It will just end up a bloody mess. I agree that the proposed tax would remove liquidity from the market. Also, if they make a profit, they are already paying tax as normal income for short term. So, if you cut down the trading, you will probably cut the gross tax revenue.

    Finally, I don't think this has anything to do with eliminating trading. It has everything to do with extortion.
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    • Posted by  $  2 years, 10 months ago
      I think everyone agrees that high frequency trading is no harmful to the market...but is it really? Granted the tax is bad and won't change much...just another thing to get around but
      Does anyone here have a knowledgeable take on this?
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      • Posted by ChuckyBob 2 years, 10 months ago
        OK, I'll bite...High frequency trading adds liquidity to the market. So, when you are trading a popular stock and you want to dump it and you put in a market order (that is not generally what I recommend), bang! it sells. Try the same thing with a less popular stock, it will take longer. That's what liquidity does for you. Now, back in 2009 I played around with scalping. I would buy 100,000 shares of a dollar stock. Immediately after buying, I would put in a sell order for one penny more than I bought it. Generally, within 10 minutes it would sell due to liquidity and velocity. So, in 10 minutes I would make $1,000. It's not quite as easy these days due to the shift in the market, but the concept is still there. What I was doing was not "high frequency" trading, but it used the same concept.
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        • Posted by  $  MichaelAarethun 2 years, 10 months ago
          That was the penny stock trading method if I remember and it used automatic buy and sells?
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          • Posted by ChuckyBob 2 years, 10 months ago
            Usually when they say "penny stock" they refer to shares with under $5 prices that trade OTC. Scalping refers to taking a very small arbitrage on a large number of shares. So you know that there is a very high probability that your sell order will transact in short order. This way you are in and out in ten minutes and have the rest of your day to play.
            In my particular situation I was trading CIT (not to be confused with C). It was not yet bounced to OTC so we had some volume to play with and it was trading right around $1.00 a share.
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        • Posted by CircuitGuy 2 years, 10 months ago
          In the late 90s I did something like this. A website would promote a small cap stock, probably as a pump-and-dump, scheme. The word would get out, and the price would go up. If you were getting the info from the website that first promoted it, you could buy it and almost immediately place a sell order and sell it to people who found out later. Of course the scheme depends on being the first website to pump the stock and not being farther down the chain.

          Oddly, I would have thought of myself as bad for doing a pump and dump scam, but somehow if someone else was doing it, and I knew it was a scam...

          This seems incredibly stupid now, but this was the first time I could place orders online without large commissions. My colleagues and I were all getting wealth without work from options on our tech employers' stock. It led to a lot of stupid thinking around investing.
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          • Posted by  $  MichaelAarethun 2 years, 10 months ago
            I iused the good offices and advise of one of the mates on a merchant ship. We had complete net access and he used it to do the penny stock thing and tutored some of us as well. That was at the time of the suitcase economy of Eastern Europe (see Casino Moscow by Brazenski) and some of us were into the blue jeans for whatever trading business. We were able to move some of the gains by putting them into the penny stock markets.the trick was to watch for the tax consequences and not run afoul. Number Two to do the homework and due diligence on selecting stocks to buy and at what price and at what sale price. A daily or nightly discussion as we moved around the world. What happened in the end?

            No one is chasing me with a tax bill in hand and that's all that counts.
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  • Posted by  $  allosaur 2 years, 10 months ago
    The jackass party has never seen a tax it did not like. Period.
    Yes, I'm talking like the Taxer-In-Chief. Period.
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    • Posted by NealS 2 years, 10 months ago
      Tell them to go to Hell at the voting booth. We've got to start standing up to these people with these destructive mindsets.
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      • Posted by  $  allosaur 2 years, 10 months ago
        I have been since 4 years of Peanuts Jimmy Malaise helped me grow a brain and tell him to go to hell by voting for Ronald Reagan.
        Too many voters are not real American citizens anymore. Just ignorant clueless sheeple.
        I watched some boneheads in bikinis get questioned by Watters World on Fox last night. Disgraceful. Couldn't watch it all.
        Had too much Independence Day barbecue in me to get sick.
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        • Posted by  $  Suzanne43 2 years, 10 months ago
          I saw Waters' World, too. It was awful. Too bad that we can't ship these idiots out of the country. But that's never going to happen. The Democrats would lose their base.
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          • Posted by NealS 2 years, 10 months ago
            I saw it too. The question is, "do they vote? Just like getting citizenship used to be, there should be a test to vote - at least a test on the Constitution, what we and our politicians are supposed to be following. But then again our current "leadership" somehow seems in my mind to be doing just the opposite of what the Constitution protects us from.
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            • Posted by  $  allosaur 2 years, 10 months ago
              "Do they vote?" An interesting question
              I recall during the 70s an Alabama county I lived in voting dry to stay dry as far as buying even a can of beer was concerned.
              A lady who worked in a convenience food store told me she would have danced in the street had the county gone wet.
              I asked the lady if she had voted. Still wearing a smile, she said, "No. I just knew the county would go wet this time."
              It is 2016 and Biibb County is still dry.
              Prohibition never really went away for some folks.

              http://www.abc.alabama.gov/(S(4tzd5qn...
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      • Posted by  $  2 years, 10 months ago
        The correct term NealS is "brain set" they have no mind...if these creatures didn't cheat then the voting booth might work...it would have to be overwhelming to make a difference.

        But I echo your thought.
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      • Posted by  $  Suzanne43 2 years, 10 months ago
        First of all, Neal, thank you for your service to our country. I have voted in every election since I could vote. Unfortunately, moochers now comprise almost fifty percent of the voters in our country. They love taxes, especially the ones that they don't pay.
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        • Posted by  $  2 years, 10 months ago
          Maybe we should all stop workin...kind of a different take of John Gault
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          • Posted by  $  MichaelAarethun 2 years, 10 months ago
            Example of that is the Russians under the Soviets. "When they quit pretending to pay us we shall quit pretending to work."

            20 years ago one dollar or less US would buy a gallon of real gasoline. A hamburger was less than a dollar about to seventy cents along with a cheap loaf of bread. You may not remember those days. My wages working construction ranged from $ 7.50 an hour flagging traffic for a part time agency to $23.25 if it was a Davis Bacon local prevailing wage union only job. Average for the union was high teens and the city and county mid teens in Dollars. The $7.50 was for the majority of people at that skill level but prevailing according to DC was $23.00 To give both sides of the picture we bottom enders paid no union dues nor made donations to no political funds. The unions did.

            We worked eight to sixteen hours a day but time and a half was unheard of so I went back to sea at age 55 where the chicanery was just as prevalent but conditions better and everyone worked seven days a week

            What has changed? By 2006 I had determned to move my retirement savings out of the country it was evident a crash was coming. Tht happened in 2008. Two major items fueled that occurence not including a war that started in 2001 and still has not been won. In fact we lost it. One was ethanol we benefited a few agri and fuel corporations, destroyed engines, and cost more in subsidies than it was worth without producing better milage nor reducing pump prices no lessening noxious emissions. What it did do was drive up the price of food natinal and world wide by 30%. the hamburger now cost a dollar plus or would have except for another crisis and the cost of sending free food around the world went up 30% or so.

            The other crisis was the housing bubble boom busted. The notion of affordable housing for those who had zero credit rating caused another rise in the cost of living as hundreds of thousands of home buyers who couldn't or wouldn't pay were back looking for cheap rent. N otice Not one home OWNER was in trouble at this point until those two occurences caused a lot of other problems among them tax increases. Now everyone or most everyone was in trouble. Loss of buying power for the dollar? About 40% or so. That included Mom, Pop, Grandparents now retired and anyone on unfunded retirement.

            But let's call it 30% and leave room for the next one. When they quit calling it Recession II We'll pretend our dollars are worth more than 60 cents.

            Along came a large and then a tsunami government borrowing as jobs disappeared what little we had. Businesses and money fled the country and when the wars were slowed down and reservists sent home they reclaimed their old jobs which put more people out of work.

            More money was borrowed but i t became evident there was no intent to every pay it back.

            Instead we got inflation we got more devaluation of buying power and we got debt repudiation meaning the government reneged on it's debts.

            One quick example is COLA. After six or seven or eight years o f zero to one percent adjustments that 30% loss of buying power has never been included in COLA even though the government caused it.

            So I guess while they are calling it Cola we'll pretend it Pepsi.

            IT's called the (Cycle or Circle of Economic Repression) There' a another go round coming up to pay for the Obama's eight or nine trillion addition to the national debt which MUST be service else no one would lend any more money. Except perhaps for the forced loans in the forms of Savings Bonds the military is strong armed into buying.

            So who will pay the frieght this time? WhyGrandpa and Grandma stillhave a dollar or two of their retirement funds left. Mom and Dad are thinking about life on Social Security and their retirement totaling enough to buy whaqt SSA by itself. Juniors college fund. Forget it. he can sign up for the draft along with Juniorette and try to get a government loan. except...the one's who got in first have decided not to pay theirs back.

            Jobs are not happening and the only relief offered is a $15.00 minimum wage which after taxes means you can afford that $5. to $7 hamburger.

            Gas is down? Yes but a new gas tax is on the way...after all that gas decrease is found money for the government so..........

            Remember the Russians. While they pretend to know how to govern and run an economy. We'll pretend to registere and vote.

            The only way it's going to be fixed is gt rid of the problem. One President, one Vice President, 100 Senators and 435 Representatives and then cut government by 30%. After all it's a fair share is it not?
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          • Posted by NealS 2 years, 10 months ago
            I like the idea of stopping the world, or at least our little part of it to show the government what we're willing to do. Unfortunately I'm retired already and have already quit workin'. The mooching has got to stop. We need to take lessons from the moochers and learn how to change them or become just like them.
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  • Posted by Herb7734 2 years, 10 months ago
    Just another power play to gain control of your freedom in one more area.
    An Analogy: This is how the left has taken over our country. - A woman wants to poison her husband. Rather than give him a single dose of arsenic, which would surely put suspicion of murder on her, she feeds him small amounts at a time until it builds up in his system. He appears to become sickly and fulfills everyone's expectations by expiring after a while and thus suspicion is diverted away from the loyal wife who stuck by him in his death throes.

    We have been getting fed the arsenic of socialism for 100 years and it is on the verge of killing us. If Mrs. Clinkton is elected, it may well be the final dose.
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  • Posted by wiggys 2 years, 10 months ago
    Due to the poor economic condition of the country the tax revenues being confiscated by the government has diminished so the elected government workers have a need to protect their income so they band together, trust me the republicans too are in on the scam, to raise taxes on anything and everything they think they can get away with. Better trade like crazy until the tax is put into "LAW"!!!
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  • Posted by term2 2 years, 10 months ago
    This sounds like a plan to raise more money for the government. The reasons they bring up are just excuses to get more money. I find it valuable to translate all things the politicians and government say in the light of their hidden agendas.
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    • Posted by ChuckyBob 2 years, 10 months ago
      It is a very poorly thought out plan by someone who is not even good at playing tic-tac-toe. A chess player would look down the road to see the totally foreseeable, but unintended consequences. So lets examine these consequences: 1 the stated purpose is to dissuade high frequency trading. 2 high frequency trading currently generates tax revenue. 3 if high frequency trading disappears, so does the tax revenue that is currently being generated and the proposed tax is never realized. What's wrong with this picture?
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      • Posted by term2 2 years, 10 months ago
        I think the government generally knows what will happen. They have many agendas. Their first agenda is to increase governmental powers by passing laws. Secondly, they want the new power to increase revenue. Thirdly, they stupidly underestimate the citizenry's ability to subvert laws
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        • Posted by wiggys 2 years, 10 months ago
          subverting laws is something that they calculate and build it into the fines you will pay if and when someone is caught.
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          • Posted by term2 2 years, 10 months ago
            what I have also found is that when there are alternatives to legally paying the taxes, other taxes are there that apply to the alternatives and they all seem to come out the same.

            example is in order to get rid of employees and all the hassles and taxes with them, we might choose to automate. Then I find that at least in Nevada there is about a 1.5% business property tax payable on all machinery- EVERY YEAR. So not only does one have to build or buy the machine, you have to pay essentially an asset tax every year for the privilege of owning and using it.
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  • Posted by freedomforall 2 years, 10 months ago
    Dems have never seen a tax they didn't like, but this one will die quickly as soon as the banksters make it clear that political bribes will end for anyone who supports it.
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    • Posted by  $  MichaelAarethun 2 years, 10 months ago
      Or pass as whomever is on the other side of the fence checks their suipport fund donations. Banks are not alll of the monied classes. And not to forgtet foreign funds which are no legal i as free speech as well.
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    • Posted by  $  2 years, 10 months ago
      You got that right...I thought it was a amazing innovation and has allowed many to profit in a tough market...ya gota give em that.
      Dems don't like it cause their not part of it and don't understand it...they'd need a mind for that!
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  • Posted by CircuitGuy 2 years, 10 months ago
    "Sanders has proposed taxes on all trades -- imposing a rate of 0.5 percent for stocks, 0.1 percent for bonds and 0.005 percent for derivatives. "
    This would encourage people who want a long position in a stock not to buy it but rather to write in-the-money puts and take time premium instead of dividends. It gives similar exposure and cuts the tax 100-fold.
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  • Posted by Joseph23006 2 years, 10 months ago
    As usual the Democrats want to get at the Republican RICH but there are probably more rich Democrats! Those who will suffer the most will be the middle class traders, because they would trade more, the rich can afford to sit on their investments for a longer time. Democrats are lousey economists, they never get it right, they only make it worse.
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