Transaction Tax Resurfaces on a Health Care Bill

[letstrade 10]

Last month, the transaction tax (fee) for financial transactions was taken out of the stimulus package. However, the liberal Democrats are now trying to get it through on another bill----House Bill 676, the National Health Care bill.

 

http://www.pnhp.org/docs/nhi_bill_final1.pdf

 

The transaction fee is listed as a source of funding for the health care bill on page 19. I have seen sources say it is 1/4% or 1/3% on stock and bond transactions. There is a group of Democrats in the House that seem determined to get this transaction tax passed into law.

[brownsfan019 17]

I hope this doesn't apply to futures trading... Usually the futures are treated separately from stocks.

 

Anyone know if that applies here?

 

No time right now to read the pdf or I'd try to hunt it down myself.

[letstrade 10]

With the stimulus package, it was a tax on stocks, bonds and most derivatives including futures. This current bill seems to indicate just stocks and bonds, but that can always be changed to include other instruments, just like the tax could be completely dropped just like it has been in the past.

 

However, the main idea here is that there is a group of Hoouse Democrats who seem to keep trying to get the tax passed in some sort of bill.

[Tasuki 10]

And to think I respected the liberal democrats. We've got to fight this folks, if it's as bad as it sounds.

[brownsfan019 17]

I agree, burying this on some health care thing is crazy. Also the reason why politics are not my thing. How they are able to piggyback stuff on bills that have nothing to do w/ the topic is beyond me.

 

For example, the Unlawful Internet Gaming Act was put on an act that was considered must pass but had nothing to do w/ internet gaming...

 

More info on how that happened...

[Tasuki 10]

http://www.house.gov/lynch/

This link goes to the homepage of Congressman Stephen F. Lynch of Massachussetts (he's in the 9th district which includes Boston and some of its southern suburbs).

I saw him on TV (CSPAN I think) in which he was questioning Ben Bernanke about taxing us traders to recoup some of the losses that the government will incur during this bailout business. Bernanke was against the idea, Lynch was pushing it.

 

If anyone here on TradersLab lives in the 9th district in Mass, and you agree that this tax on us is absurd and wrong-headed, then please WRITE YOUR CONGRESSMAN!

 

Recently, Time magazine wrote an article on their "top 25" names responsible for the financial debacle we're in. Guess what, not a single trader was on the list. Big surprise. Lynch's belief that somehow we're responsible for wasting billions of dollars in bad loans or the house-flipping frenzy is utterly incorrect. This simple concept has to be explained to those congresspeople who somehow have been persuaded that we are the bad guys and we should pay for for the excesses in the banking and mortgage industries.

 

So, to anyone out there, does anyone know of congressional representatives other than Stephen Lynch who are in favor of such a tax on traders? If so, please let us know so that we can write to them.

Edited February 16, 2009 by Tasuki
clarity

[Tasuki 10]

http://www.traderslaboratory.com/forums/f2/let-wall-street-pay-for-wall-5446.html

 

Looks like a second thread has opened up on this same subject. Link is above. It's under the "Market Analysis" section.

[rcossey73 10]

Just an example of one of my trades today to show how bad this is.

 

I shorted aapl 1000@91.95 and covered at 92.10 for a .15 loss.

 

Total loss was $150

Brokers commission was $10

Transaction Tax would be $230.25.

So instead of being out $160 I would be out $390.25.

 

In other words even if the trade went in my favor I would need to make more than $230 just to come close to breakeven.

[Tasuki 10]

Looks like Hubert Senters and John Carter have gotten their act together to create a petition to sign. Here's the link:

 

http://clicks.aweber.com/y/ct/?l=Fx7hq&m=1gG.20wr5M0f5r&b=e2pemCcnVZIcBQRbqP094Q

[firewalker 10]

Steenbarger commented on it in his blog as well:

 

http://traderfeed.blogspot.com/2009/02/proposed-securities-transaction-tax.html

[mikebanger 10]

I just got an email an about this new traders tax bill in Congress now. From what I understand this could ruin day trading for everyone.

 

The email had a link to go to and sign a petition to send to U.S. Congress.

 

I TOOK ACTION just signed the petition and figured all the traders in here would want to as well as it is very important they don't pass this bill.

 

 

http://www.VoteNo1068.com/