Posted on 04/16/2011 10:16:36 PM PDT by AmericanDave
I read a few years ago a proposal to put a penny tax on each share of stock traded.
I checked the NYSE stats page and found in 2010 over 210 Trillion shares changed hands.
Simple math shows that a penny a share tax would generate an additional 2 Trillion dollars to the US Treasury. Every year.
The most aggressive budget put forward right now will cut spending by 6 Trillion over TEN years, thats 600 billion a year in cuts.
Since our spending problems exploded with the stock market derivative bailouts, it is only right the market should pay it back to the taxpayers.
Collections would be simple as the transactions are already reported to the IRS.
If you sold 100 shares of XYZ stock and collected $3000 dollars, you would pay income tax on the capitol gains, and your broker a fee of 5 or 10 dollars; and only $1 to the gov't for this tax.
Your brokers however, trade thousands of shares and make more money, and would therefore pay more tax.
Who do you think gave you and your supporters the Constitutional authority and moral right to go around and confiscate other peoples' properties, life, liberty, and pursuit of happiness for your favorite hobby horse and money fairy?
On any given day, 65% to 95% of all stock transactions would become unprofitable, i.e. not executed if there was a penny per share tax on transactions.
On top of that, it would destroy the pinksheets, further crushing the ability for firms to attract capital to increase employment in this country.
Regards,
Rein in the Fed, cut them back to what is required within the Constitution and NO MORE, and get rid of the current tax system. Those two things would go a long way to returning America to its rightful place. Keep the current system and do nothing but fight over $380 in cuts, and we will surely die.
Who are the producers today?
“Who are the producers today?”
An excellent question. We know who they aren’t: government employees, commodities speculators, day traders, retirees, welfare recipients, the Plunge Protection Team.
Do you know who the producers are?
Democrats say "raising the income tax on the top bracket by 2% will raise $billions". Then they act shocked when revenues go DOWN because the wealthy move money into tax-free investments like municipal bonds.
Currently, you have active traders buying and selling frequently, because the cost per trade is low. They try to capture profits in the range of pennies per share.
Put a tax on stock trades, and market liquidity will come crashing down. People will no longer engage in day trading. They will buy stock if they see long-term prospects.
Day trading, meanwhile, will move offshore outside the reach of the IRS.
To earn a gain of only $10 to $50 on a typical daytrade can require an investment of $50,000 to $100,000 for 100 to 500 shares. The gain on the trade can look something like .01% to .05% on the trade. Yet, you propose to forcibly seize and take 4% of every trade, thereby guaranteeing financial ruin and eliminating the incentive to contribute money to finance businesses. This is a classic example of why the mob of a democracy cannot be trusted when iit can vote itself the property belonging to other people in utter disregard of financial relaities. Constitutional safeguards for the poperty rights of minorities and the rule of law is the hallmark of a healthy Republic.
The first thing which needs to be done is control the spending. No amount of revenue will fill the coffers if we are spending at the rate we have been, in fact, it will only encourage more spending.
Absolutely true, I will admit.
You are right Sir!
I reviewed the chart I looked at and the first collum was in Billions but the second for total stock volume was in millions! OOPS
I was off an order of magnitude and stand corrected.
“http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=table&key=3161&category=3"
good to know the concept is actually in use.
Thanks,
good to know the concept is actually in use.
Thanks,
“On any given day, 65% to 95% of all stock transactions would become unprofitable, i.e. not executed if there was a penny per share tax on transactions.”
Are you saying that at TWO pennies a share profit they WOULD still be profitable? Sounds like a day-trader.
Small traders lose many more cents per share on a transaction from optimum during the days volatility.
And brokers make money on the float in a day.
But IF many trades would then be un-executed; that would of course lower the volume significantly.
Yet I have gotten a response here that this tax is already being done in the European markets without financial ruin!!!
What are you talking about? The govt takes nearly 25% of my “trade” forcibly every single day. You come up with a better idea of how to run the govts in America. The income tax is a horrible way, full of graft, corruption and horrible inequities.
Divest for smaller government.
No problem Dave - been there, done that.
“So you would rather live with the current cobbled together system than look for an alternative?”
No, that’s absolutely not what I said - I was merely pointing out that the numbers were incorrect. The system we have now is awful - from the bit I’ve read of the Fair Tax, I kinda like that.
I will allow you that. I’m not on here to bash you. Sorry if I seemed like I was piling on.
I never suggested nor did I say I support the tax idea. You need to go back and see who posted this thread.
No problem. ;)
I have liked the idea of a FAIR tax better than the current system, but it has been around for years and will not ever go anywhere. There has to be a way to get this fixed, I mean the tax system and the way we fund govt, before another generation is cheated from the glorious financial freedom we should have.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.