Let Wall Street Pay for Wall Street's Bailout Act of 2009 (Introduced in House)

[zdo 20]

Let Wall Street pay for...rant

 

Wonder if the transaction tax would apply to the (unregulated?) insurance contracts written on multi-sector collateralized debt obligations? Or to CDO transactions themselves? While congress is being so stupid, how about just a bill to charge transaction taxes on all the unregulated derivative transactions the 'too big to let fail' banks and financials make.

... and while they're being so reactive to things that 'got' us into this mess, why don't they consider letting the mortgage broker business pay for ... with a hefty little transaction tax on each risky mortgage they write... and now re-write with even more risk in them

 

I'm sure they could find a way to blame the bush administration for these new taxes in their findings...

Speaking of findings and that the nation is outraged by how the first bailout was handled...let me express my outrage that ANY bailout was ever even considered! And if they are going to do bailouts, let me proclaim I much much much prefer the 'no strings attached' type to the fascist variety 'someone' is cooking up with increasing intensity in each of the new (and subsequent) bailouts. I use the word 'someone', because how could actual congress members have time to write these big bailout packages if they don't even have time to read them before voting on them... rant out

[OAC 10]

I can't see how they could collect tax from abroad apart from asking US citizens to declare and pay it on their tax returns. Basically unenforceable and if that's the case then the exchanges might as well move offshore.

Also interesting to see if they plan to tax non US citizens (like myself) who trade US futures.

 

No, this is a transaction tax not income tax. They will collect from the clearing firms, they in turn will deduct out of your account.

I imagine it is very much like the exchange fees you are paying now

[rigel 10]

If Brokerage firms go bust in US and liquidity dries up in US futures, how can the rest of the world bourses escape unscathed. Trading will dry up worldwide.

[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/

[markl67 10]

How do we get CNBC to announce this over the air - that would get some serious attention. Get Rick Santelli on it!

[rallyclimber 10]

Just wrote a letter to my Reps asking them to vote no.

 

Anybody know how much support this p.o.c. legislation has?

[omni2006 11]

thanks to everyone posting links to this bill and related articles and petitions. i know it is on many traders' minds, mine included, and i don't think we can be too loud about this. even if i didn't trade, it doesn't take much thought to realize passing this bill would be devastating - to the US, to the economy, and to the world.

 

but, i'm a bit torn about one thing. i would love to recommend people read some of the comments posted on various online articles pertaining to this ludicrous tax proposal. i really would, because it could be entertaining. and enlightening. the breadth of complete and utter misinformation is astounding. however, the frightening aspect is that a lot of people believe in and support this bill. they are buying what they are being fed. and, obviously, the sponsors and co-sponsors of this bill quite literally have no idea what they are talking about nor the economically crippling ramifications of what they are suggesting.

 

so, definitely make your voice heard and help keep this lunacy from materializing. and, if you have a strong stomach, take a moment to read the public's perception of reality ... sadly, it is far too similar to those sponsoring the bill.

 

finally, this should help traders, of all instruments, strategies, and timeframes, quickly develop a new sensitivity to anti-trader legislation. even if this thing completely falls on its butt, i would expect them to try to accomplish the same thing via some other bill or bills ... be it taxes or fees or what have you, i don't trust this issue to die quickly or quietly or completely.

 

have a great weekend

 

take care -

 

omni

[OAC 10]

(7) The United States had a transfer tax from 1914 to 1966. The Revenue Act of 1914 (Act of Oct. 22, 1914 (ch. 331, 38 Stat. 745)) levied a 0.2 percent tax on all sales or transfers of stock. In 1932, Congress more than doubled the tax to help overcome the budgetary challenges during the Great Depression.

 

 

Look on the brighter side, between 1914 and 1966(more than 50 years), US had a transfer tax of 0.2 percent on stocks, But the futures market seemed to be exempted. Aha ! My take is that the futures market would not work without liquidity provided by the small speculators who take the other side of the trade of the hedgers. There is no large mutual funds or pension funds to provide that liquidity in the futures market !

Edited February 21, 2009 by OAC

[james_gsx 16]

So we should just assume our letters and emails are not read and why bother?

 

 

 

 

If you stop caring and assume no one is listening, then you can't complain if your trade costs go up significantly.

 

 

Not really, you just view politics from a completely different perspective than I do (not parties, I'm a Republican). Trust me, I'd love to discuss real politics with you. PM me if you actually want to discuss politics. I'd love to discuss this with you any day.

 

I've wrote to plenty of senators and representatives, the only time I ever got useful feedback and talked to someone was when I wrote state rep Cory Gardner. I was able to discuss with him my states plan of action for 2009, mostly the economic plans. In fact, during the TARP vote I wrote to Mark Udall, which of course was largely ignored and I got canned response. Of course that's to be expected due to the high volume of people writing letters, but even during slow times I only got responses from aides.

 

It's all a chess game. Each politician is required to raise x amount of money for their party, the longer you've been around the more money they expect you to raise. They have to introduce bills and get attention so they can attract potential supporters who will write a check. Everyone knows this won't pass, hence why writing in won't do you any good. This was simply designed to do 2 things.

 

1 - attract funds from a supporter to donate to the party for the upcoming elections. You do realize a huge chunk of people who attended Obama's inauguration were execs from Wall Street right? It's all a money game.

 

2 - show his poor voters that have been severely hurt in this recession and want to naturally blame someone, that he is on their side. Anyone can go up there and list off 50 reasons why he's an idiot, but the voters will only remember the emotions, their hatred towards ppl on wall st. They don't know this bill has nothing to do with the recession, but they hear wall st and jump all over it.

 

It's pretty obvious, just look at his website. He has a ticker for the national debt and is gung ho about punishing everyone. It's all a gimmick to raise money and get more votes come next election. He's up for re-election every 2 years, he doesn't have the luxury of a senator who is up for re-election every 6 years.

 

You also have to take into consideration that it's much easier to block a bill in Washington than it is to pass one. I understand where every trader is coming from, if this bill were to pass then it would be devastating to our markets and our businesses. But everyone needs to take a step back and be a little more realistic.

 

The biggest problem isn't even with the politicians. It's about the people who vote them into office. They plant these seeds so morons can vote them into office. We live among the dumbest people EVER. Ask someone randomly how many years a senator serves, and they wouldn't be able to tell you. Ask them who represents them, they couldn't tell you. That's exactly why this stuff gets made up, so the small amount of people who actually knows who this guy is will vote for him and write him a little check. It's all a game to win over the minds of the masses. Read Plato, he writes it out clearly and those same tactics are used today.

 

If you actually want to do something about this situation, simply writing an e-mail to some politicians aide won't do you anything. That's all I'm really saying. You have a much better chance working with a lobbyist who can lean on other politicians to block the legislation. The people who are actually doing something (the exchanges, GS, MS, etc) would all do this if they needed to.

Edited February 22, 2009 by DbPhoenix
name calling;personal remarks

[james_gsx 16]

 

but, i'm a bit torn about one thing. i would love to recommend people read some of the comments posted on various online articles pertaining to this ludicrous tax proposal. i really would, because it could be entertaining. and enlightening. the breadth of complete and utter misinformation is astounding. however, the frightening aspect is that a lot of people believe in and support this bill. they are buying what they are being fed. and, obviously, the sponsors and co-sponsors of this bill quite literally have no idea what they are talking about nor the economically crippling ramifications of what they are suggesting.

 

so, definitely make your voice heard and help keep this lunacy from materializing. and, if you have a strong stomach, take a moment to read the public's perception of reality ... sadly, it is far too similar to those sponsoring the bill.

 

This is exactly the problem. The publics perception of reality is terrible, because they don't know what's really going on. And this is good, because the public is irrational. This has been known for hundreds of years, and it's why politicians have been powerful for so long. They paint a specific picture of "reality" then turn around and do something completely different. Why do you think Obama's plan for transparency is so popular? It gives the public the feeling that they know what's going on, they feel more in control. It's all just an idea, so the politicians can turn their back and do whatever they want.

 

We could go on for hours, but this really isn't the time or place.

[OAC 10]

Look on the brighter side, between 1914 and 1966(more than 50 years), US had a transfer tax of 0.2 percent on stocks, But the futures market seemed to be exempted. Aha ! My take is that the futures market would not work without liquidity provided by the small speculators who take the other side of the trade of the hedgers. There is no large mutual funds or pension funds to provide that liquidity in the futures market !

 

 

In my opinion the worst case scenario is that they may eventually pass a transaction tax on stocks only that is much smaller percentage than what they have proposed . You can rest assure that there will never be a transaction tax on futures. Beside the above reasons that futures were exempted over a hundred years since the days of Wyckoff and Gann. It is inconceivable that they will punish CBOT and CME, the pride and joy of Chicago's financial community, for the mortgage securities mess. After all Chicago is the hometown of Obama. Do I hear veto ?

[DbPhoenix 42]

I've further edited some of the posts made to this thread in order to veer away from personal animosity. I haven't changed anything that OAC did, just gone a bit further.

 

Moderating threads like this is not easy, largely because the subject matter gets people hot, and when people get hot, they tend to regress and to say things that are only marginally on topic, dragging their agenda baggage into what might otherwise be a rational discussion.

 

Attacking Washington, Wall Street, the Military-Industrial Complex, various and sundry -isms, and even the public at large, while often adolescent, is not in itself off-limits. Attacking each other, however, takes the participants and the forum down a road whose end can be seen on other sites which are generally, shall we say, unmoderated.

 

One of the chief advantages to discussing trading is that one's own prejudices, cynicism, inexperiences, ignorance, bigotry, paranoia, intelligence, age, sex, and various pathologies have nothing to do with the movement of price, however one chooses to view it (charts, T&S, etc). I've known people who've traded off laptops, in bed, while dying, discussing all the while the charts, the markets, and particular trades with people young enough to be their great-grandchildren, all discussing these aspects at the same level, with the same general goal: to make money. As long as they avoided veering off into personal issues and stuck to the behavior of price, Hitler and Gandhi could interact quite well on a trading board, as could Mother Teresa and Dakota Fanning.

 

I myself am not immune to this impulse. I'd love to address some of the remarks made here. But they have nothing to do with price movement and even less with the bill. So I'll edit instead.

 

I will, however, suggest that the public is not irrational; it is merely self-serving, just as we are. Nor is it monolithically self-serving. Every individual has his own needs, his own wants, his own views on how those needs and wants can be met. When an individual's needs and wants coincide with someone else's, even though the coincidences may be shallow and spotty, alliances begin to form. If the coincidences go deeper and become more consistent, those alliances can also go deeper and broaden. This is where "parties" -- and any other interest group based on common needs and wants and goals -- come from.

 

To view the public as a "herd", therefore (or a mob or a crowd or as being single-minded in any regard), is to become far more ineffective than he might be by understanding the multi-faceted nature of what appears to be a united effort. This applies whether one is studying the political and/or social scene or he is studying price movement.

 

This thread, therefore, needn't turn into "chat". There is much of value that can be said regarding this bill and the issue it attempts to address. And all of it can be said without attacking anyone, on this forum or anywhere in the broader out there.

[Sledge 13]

I found out about this a few days ago, I urge all of you to email any trading friends you have and inform them. I sent a personal message to my 3 reps here in the state, asking them to consider that the "small business owner" i.e. retail traders- are the ones who will be hurt. Like any other "small business" when you have 90% of your tax revenue coming from the small business sector- it is absurd to try and drive them out of business. We are the wrong target to tax. I also informed them that this tax would push many people beyond their "risk:reward ratio" and not trade at all. Without any of us trading- they are losing all of the tax revenue on the income we currently make.

 

Additionally, this is not just forex or futures trading- this would effect- 401K's mutual funds etc. It is a step backwards- people are already NOT putting their money into 401K's to watch the market evaporate them right now- this would put the nail in the coffin of many LARGE firms, with larger firms dying off- more layoffs, more unemployment- vicious cycle. I'm really uncertain what Congressman Peter DeFazio's pure hatred for the free market is- but I'm too small of a fish to take the risk on certain trades if this somehow passed!

Aaron

[brownsfan019 17]

I started this thread in hopes of letting traders know what was up in case they hadn't heard. That's it. Your choice if you want to email, call or whatever but as I said earlier, if you do nothing, then keep your mouth shut if this passes and you have to trade elsewhere.

 

At this point in the process, getting the word out and then contacting your reps is a good start. While one email about this is unlikely to get a response, if reps are getting a nice amount of these emails from people all over asking them to vote no on this, you never know what could happen. If the overwhelming public support is to vote no, hopefully that influences them more. I doubt there's many public support emails coming in supporting this measure (at this point at least).

 

Other than that, there's not much else for us regular guys to do right now. Obviously we are not going to hire our own lobbyists or anything like that, so this is what we can do. If it gets serious, we have to assume that the CME and every other firm that would be affected would step up their game. Hopefully it does not reach that point.

[Harlequin 10]

No, this is a transaction tax not income tax. They will collect from the clearing firms, they in turn will deduct out of your account.

I imagine it is very much like the exchange fees you are paying now

 

In the UK we have Stamp Duty on share sales which is levied in the same way, however if you are not a UK resident you don't have to pay it (your broker doesn't deduct it). I couldn't find any information on that for this bill, I guess they haven't even thought about it.

[markl67 10]

Would currency trading fall under the purview of this proposed tax?

[Trader333 10]

Would currency trading fall under the purview of this proposed tax?

 

Not as I understand it.

 

 

Paul

[daedalus 10]

Lets face it.... if it did pass there would be a massive flight to the forex markets overnight.

[brownsfan019 17]

Lets face it.... if it did pass there would be a massive flight to the forex markets overnight.

 

Forex and other exchanges that don't have this extra fee.

 

Hopefully someone is wise enough to realize that before this even has a chance to see some movement.

[mikebanger 10]

Has anyone heard an update on the traders transaction tax?

 

FWIW, I keep checking updates on http://www.VoteNo1068.com/

[rallyclimber 10]

Joe public shares/emboldens his strong sentiment

 

http://www.cnbc.com/id/15840232?video=1051076486&play=1

[GlobalMac 10]

New attempts for proposing a Transaction Taxes are being formed:

 

http://thehill.com/homenews/house/56789-afl-cio-dems-push-new-wall-street-tax

 

The site below has some important details on the transaction tax and what to do to prevent it from passing into legislation.

 

url=http://www.greencompany.com/blog/index.php?postid=29

 

The information from a discussion on the transaction tax is available through a podcast from this link:

 

http://www.greencompany.com/EducationCenter/ConfCall/GreenTraderTaxConfCall090309.mp3

This is going to a fight. Information for the bill - H.R. 3379 and for H.R. 1068 can be found here: THOMAS (Library of Congress) by selecting 'Bill Number' and including H.R. in search.

[GlobalMac 10]

This site has consistently provided information related to the Transaction Tax and updates the information on a frequent basis.

 

There is a newly published article here referring to developments at the G-20 meeting.

 

The information seems positive - but legislative sentiment can always turn.

 

Financial-transaction tax is dead on arrival globally, which is good news locally - GreenTrader Weblog