Why in the heck does government believe it should be able to pull this scam anyway: “paying an exchange trading fee”.
Why in the heck should there even be an exchange tax??
The exchange fee is not a tax; it’s a fee from the market to trade there.
Ebay does the same thing — you pay to have a place to trade.
That said, you are correct the reason the gubmint cares is markets do report trades to the gubmint and it is harder to tax things you do not necessarily know about.
The “exchange trading fee” is not a tax, rather a fee brokerages pay to the stock exchanges. Scottrade is my brokerage which may execute trades within their order book without going through an exchange, thereby avoiding the “fee”. I notice on some trades that, on large orders especially, the transaction is executed in partial tranches. This occurs mainly on sell orders rather than buy orders, I’ve noticed and is usually to my benefit vs. the market ticker. In this way, the brokerage becomes a mini-exchange. This is nothing new, it’s been going on ever since there were brokerages.
Once again, no matter who levies it, a fee is something that markets seek to avoid. I understand the need for a fee, but I understand why people would seek “dark markets.”