Democrats push $150B stock tax on Wall Street

RightinNYC · Nov 24, 2009

This may well be the most embarrassing example of populist garbage that I've ever seen:

A House bill still being drafted aims to raise $150 billion each year to pay for new jobs.

Under a bill being drafted by Democratic Reps. Peter DeFazio (Ore.) and Ed Perlmutter (Colo.), the sale and purchase of financial instruments such as stocks, options, derivatives and futures would face a 0.25 percent tax.

The bill, a copy of which was obtained by The Hill, is titled the “Let Wall Street Pay for the Restoration of Main Street Act of 2009.”

Half of the $150 billion in tax revenue would go toward reducing the deficit, while the other half would be deposited in a “Job Creation Reserve” to support new jobs.

...

The stock tax measure specifies that tax revenue would need to support jobs that pay at least the median wage in the United States, promotes manufacturing jobs and prohibits any recipient of the $700 billion financial bailout from directly benefiting from the job reserve fund.

The bill aims to exempt retirement accounts from the impact of the tax.

A group of consumer watchdog organizations and labor unions sent DeFazio a letter this week supporting the tax bill.

“Your bill would put Wall Street to work for the public good, by placing a modest securities transaction tax on trades of stocks, options and swaps. A tax on these trades has little impact on the average investor or pension fund because they hold their investments for the long term, but it does disincentivize Wall Street gambling and high-volume short-term speculative trading,” the organizations wrote.

The groups include: Americans for Financial Reform, Public Citizen, the Service Employees International Union (SEIU) and the AFL-CIO, among others.

Democrats push $150B stock tax on Wall Street - TheHill.com

Some Democrats like to paint Republicans as slack-jawed yokels whose political philosophy can be summed up as "AMERICA **** YEA!," but this is perfect proof that pandering to the LCD isn't limited to either party.

Erod · Nov 24, 2009

And whose pocket would that money REALLY go to?

Yeah, tax Wall Street and raise the capital gains tax on investors. I'm sure we can get unempoyment to 50 percent if we keep trying.

obvious Child · Nov 24, 2009

I'm not aganist putting the whole thing into deficit reduction.

Redress · Nov 24, 2009

Erod said:
And whose pocket would that money REALLY go to?

Yeah, tax Wall Street and raise the capital gains tax on investors. I'm sure we can get unempoyment to 50 percent if we keep trying.

From a tax of a quarter of one percent? Exaggerate much?

RightinNYC · Nov 24, 2009

obvious Child said:
I'm not aganist putting the whole thing into deficit reduction.

I am against a tax that will do nothing other than to make a market less liquid and increase volatility while simultaneously pushing traders to move their operations overseas.

Redress said:
From a tax of a quarter of one percent? Exaggerate much?

That's certainly an exaggeration, but the fact remains that 0.25% is actually a lot bigger than it sounds. Again, it would cost $150b/year. That's absolutely massive and will certainly have an impact on trading activity.

obvious Child · Nov 24, 2009

RightinNYC said:
I am against a tax that will do nothing other than to make a market less liquid and increase volatility while simultaneously pushing traders to move their operations overseas.

That's possible, but do remember that buying back debt at a premium is going to funnel money back into the market. Also remember that some of the biggest debt domestic holders are the biggest investors as well. There's a possibility this may increase velocity of money which should help liquidity.

That's certainly an exaggeration, but the fact remains that 0.25% is actually a lot bigger than it sounds. Again, it would cost $150b/year. That's absolutely massive and will certainly have an impact on trading activity.

I don't know about that. Massive? What are you comparing it to? Jumping 5% would be massive. What is the average daily dollar value of stock trades on the NASDAQ? I could see this as bad for futures/options, especially on certain commodities were margins are inherently low.

Redress · Nov 24, 2009

RightinNYC said:
That's certainly an exaggeration, but the fact remains that 0.25% is actually a lot bigger than it sounds. Again, it would cost $150b/year. That's absolutely massive and will certainly have an impact on trading activity.

On a 100,000 dollar stock sale, it would be 250 dollars. That is exactly as big as it seems to be.

obvious Child · Nov 24, 2009

Redress said:
On a 100,000 dollar stock sale, it would be 250 dollars. That is exactly as big as it seems to be.

Actually that's not inherently correct. We don't know if the tax is on the gross proceeds or net.

RightinNYC · Nov 24, 2009

obvious Child said:
That's possible, but do remember that buying back debt at a premium is going to funnel money back into the market. Also remember that some of the biggest debt domestic holders are the biggest investors as well. There's a possibility this may increase velocity of money which should help liquidity.

I don't understand how this could do anything other than make the market more illiquid. It will reduce trading volume and increase transaction costs.

I don't know about that. Massive? What are you comparing it to?

It's $150b being taken out of the pockets of investors. That's massive however you look at it.

Jumping 5% would be massive.

And the tax on your investment adds up to 5% after just 10 round trip trades in a year.

Redress said:
On a 100,000 dollar stock sale, it would be 250 dollars. That is exactly as big as it seems to be.

What I'm getting at is that it's easy to say "oh, just 0.25%, that's no big deal." The fact is that it will cost $150b/year. That is a big deal however you look at it.

To put it in perspective, that's about 1/6th as much money as is collected by the federal income tax.

Vader · Nov 24, 2009

RightinNYC said:
This may well be the most embarrassing example of populist garbage that I've ever seen:

...

Democrats push $150B stock tax on Wall Street - TheHill.com

Some Democrats like to paint Republicans as slack-jawed yokels whose political philosophy can be summed up as "AMERICA **** YEA!," but this is perfect proof that pandering to the LCD isn't limited to either party.

Yes, I know the idea of the right being forced to pay for what it has done is hard for Republicans to accept.

The right did the crime and now they can pay for it.

RightinNYC · Nov 24, 2009

obvious Child said:
Actually that's not inherently correct. We don't know if the tax is on the gross proceeds or net.

Total value of the security:

‘SEC. 4475. TAX ON SECURITIES TRANSACTIONS.

‘(a) Imposition of Tax- There is hereby imposed a tax on each covered securities transaction an amount equal to the applicable percentage of the value of the security involved in such transaction.

Read The Bill: H.R. 1068 - GovTrack.us

Vader said:
Yes, I know the idea of the right being forced to pay for what it has done is hard for Republicans to accept.

The right did the crime and now they can pay for it.

What "crime"? Jesus ****ing christ.

If you don't have the slightest idea what's going on, why bother posting in the thread?

Vader · Nov 24, 2009

RightinNYC said:
Total value of the security:

Read The Bill: H.R. 1068 - GovTrack.us
What "crime"? Jesus ****ing christ.

If you don't have the slightest idea what's going on and will add nothing of value to the debate, why bother posting in the thread?

Republican greed caused this economy. That bill aims to force the greedy to pay for the restoration of the economy.

I know you rightwingers hate being held responsible for your illicit actions.. but too bad.

You people did this and you can pay to fix it.

Zyphlin · Nov 24, 2009

What I want to know is where are all the liberals and libertarians that whined and whined when "The USA PATRIOT ACT" was put forward because it was given such a "propogandized" name and that it'd imply "voting against it means you're voting against being a Patriot" and how legislation shouldn't have its names be used as a means of selling it.

Cause you know...“Let Wall Street Pay for the Restoration of Main Street Act of 2009.”....isn't poloraizing, propoganda-esque, or hoping to use the name as a means of selling it at all. :roll:

Jackboot · Nov 24, 2009

Vader said:
Republican greed caused this economy. That bill aims to force the greedy to pay for the restoration of the economy.

I know you rightwingers hate being held responsible for your illicit actions.. but too bad.

You people did this and you can pay to fix it.

You are kidding.....are you not?

obvious Child · Nov 24, 2009

RightinNYC said:
I don't understand how this could do anything other than make the market more illiquid. It will reduce trading volume and increase transaction costs.

Not necessarily. When the tax is being paid back to investors who then blow it back it using premiums paid on debt, we may get a cycle that increases the speed of money. That can't help but make liquidity go up. Remember that debt holdings are rather illiquid. Converting them into cash frees up that problem. While it will increase transaction cost, 0.25% isn't that much, especially if it's on net rather than gross. And to pay down debt requires significant premium payments for early recall. Some institutions may end up better off under this if all of its goes towards debt repayment.

It's $150b being taken out of the pockets of investors. That's massive however you look at it.

Not when dollar value of daily transactions are into the trillions. $150 billion a year when every day $500 billion is traded is pretty minuscule.

And the tax on your investment adds up to 5% after just 10 round trip trades in a year.

Which is true. However, that would promote long term holdings. In a way, the Federal Government would use tax as a social engineering to prop up the stock market. Note I'm not condoning not condemning this. Just noting an observation. And how many people buy and sell a single stock 5 times a year? And if you were going to do that anyways, an actual 5% would end up being..well, you get the point.

What I'm getting at is that it's easy to say "oh, just 0.25%, that's no big deal." The fact is that it will cost $150b/year. That is a big deal however you look at it.

To put it in perspective, that's about 1/6th as much money as is collected by the federal income tax.

Perhaps, but you are looking at it in only one way. What are the benefits of debt reduction and putting more money into the hands of debt holders? Not to mention the reduction in debt servicing over time. Furthermore, think of the dollar. Debt reduction should cause it to rise.

obvious Child · Nov 24, 2009

RightinNYC said:
Total value of the security:

Read The Bill: H.R. 1068 - GovTrack.us

That appears to be current market value. That's going to kill many future and options. Imagine the impact on currency futures. Imagine the impact upon future and options for commodities where the margin is less then 1%.

Zyphlin · Nov 24, 2009

Jackboot said:
You are kidding.....are you not?

Sadly...no

Jackboot · Nov 24, 2009

Zyphlin said:
Sadly...no

I click on two threads, and two absurd posts by the same person, I think I got it now.:doh

I am really quick that way.

I will only state the obvious, greed and irresponsibility, knows no party, no country, no bounds.

PeteEU · Nov 24, 2009

Dont look at it as a tax.. look as it as payment for bailing their asses out..

apdst · Nov 24, 2009

Redress said:
On a 100,000 dollar stock sale, it would be 250 dollars. That is exactly as big as it seems to be.

The only problem with that, is that today it will $250. Tomorrow, some genius will think it needs to be raised to a $1,000, then $5,000. You get the picture, I'm sure.

Bottom line, however, 250 bucks is 250 bucks. It has the same value to you as it does to anyone else.

apdst · Nov 24, 2009

PeteEU said:
Dont look at it as a tax.. look as it as payment for bailing their asses out..

Even if the pesron paying the tax didn't receive bailout money?

Kernel Sanders · Nov 24, 2009

This makes total sense. We just gave hundreds of billions to wall street - obviously it needs to be paid for somehow. Clearly the answer is to tax wall street to pay for the handout we gave to wall street

apdst · Nov 24, 2009

Kernel Sanders said:
This makes total sense. We just gave hundreds of billions to wall street - obviously it needs to be paid for somehow. Clearly the answer is to tax wall street to pay for the handout we gave to wall street

Tax everyone, even if they didn't receive bailout money? That don't make sense to me.

Kernel Sanders · Nov 24, 2009

Shoulda put a :roll: on that post

hazlnut · Nov 24, 2009

Erod said:
And whose pocket would that money REALLY go to?

Yeah, tax Wall Street and raise the capital gains tax on investors. I'm sure we can get unempoyment to 50 percent if we keep trying.

Yeah, because lowering capital gains and eliminating the death tax did wonders... for Paris Hilton.

Some people on this board really have no concept of what true wealth really is and how it is spent... and misspent.

Democrats push $150B stock tax on Wall Street

RightinNYC

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Erod

obvious Child

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Redress

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RightinNYC

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obvious Child

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Redress

Liberal Fascist For Life!

obvious Child

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RightinNYC

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RightinNYC

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obvious Child

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