Robin hood tax pitched

Godfather.

http://www.foxnews.com/politics/2012/07 ... -some-say/

How does this sound ? maybe a good idea ? or maybe not ?

Godfather.

cincybearcat

Well, on the surface it seems like a terrific idea. The devil is sometimes in the details though.

I'm very interested in this. Gotta see if there is more info out there.

Godfather.

agreed.

Godfather.

DriftingByTheStorm

Here is my think.
I don't "agree" with federalized taxes, generally speaking.

HOWEVER,
this is just about THE SINGLE\ONLY area where I agree with taxes,
and to me it has to do with PUBLIC GOOD.

WELL OVER 90% (some say 99%) OF ***ALL*** TRADES IN ***ALL*** MARKETS ARE EXECUTED BY HIGH-FREQUENCY TRADE ***MACHINES***.

Tax the FUCK out of those trades.
They are PURE SPECULATION run by big banks \investment houses to "GAME" the system,
and they SHOULD BE TAXED OUT THE ASS.

I am firmly AGAINST the labeling of all trades\traders and futures\derivatives contracts as "speculation", and do NOT wish to insinuate that there aren't valid reasons to be in the markets. Even if you ARE speculating, you add liquidity to the markets.

My point is more that there is FAR MORE THAN ENOUGH LIQUIDITY IN ALMOST ALL (except maybe some "mini" contracts") MARKETS, and that MOST of the volume is PURE SPECULATION\GAMING.

Taxing this would not only help take some of the "pressure off the gas pedal" as it were with market volatility, but it would also rightly signal to the markets that "the time has come to reign in on exorbitant profiteering off of "gamed" transactions which essentially contribute ZERO to the real economy.

I'm with the more enlightened elite on this one, DO IT. [article discusses various Eurozone heads of state who are working towards Financial Transaction Tax in Eurozone]
Unfortunately i don't think the people at Goldman and JP Morgan are going to let this fly.
This is how they pad their books on a daily\second-by-second basis.

mikepegg44

DriftingByTheStorm wrote:

This is the same thing that was proposed by THE HEAD OF THE BANK OF ENGLAND over a month ago. He said it was NECESSARY to save the economy.

Here is my think.
I don't "agree" with federalized taxes, generally speaking.

HOWEVER,
this is just about THE SINGLE\ONLY area where I agree with taxes,
and to me it has to do with PUBLIC GOOD.

WELL OVER 90% (some say 99%) OF ***ALL*** TRADES IN ***ALL*** MARKETS ARE EXECUTED BY HIGH-FREQUENCY TRADE ***MACHINES***.

Tax the FUCK out of those trades.
They are PURE SPECULATION run by big banks \investment houses to "GAME" the system,
and they SHOULD BE TAXED OUT THE ASS.

I am firmly AGAINST the labeling of all trades\traders and futures\derivatives contracts as "speculation", and do NOT wish to insinuate that there aren't valid reasons to be in the markets. Even if you ARE speculating, you add liquidity to the markets.

My point is more that there is FAR MORE THAN ENOUGH LIQUIDITY IN ALMOST ALL (except maybe some "mini" contracts") MARKETS, and that MOST of the volume is PURE SPECULATION\GAMING.

Taxing this would not only help take some of the "pressure off the gas pedal" as it were with market volatility, but it would also rightly signal to the markets that "the time has come to reign in on exorbitant profiteering off of "gamed" transactions which essentially contribute ZERO to the real economy.

I'm with the more enlightened elite on this one, DO IT.
Unfortunately i don't think the people at Goldman and JP Morgan are going to let this fly.
This is how they pad their books on a daily\second-by-second basis.

the amount of money raised isn't that large all things considered, do you think this will do more to help curb the HFT behavior? is .003 enough to do that?

The reason I ask is simple...is the tax money made off of the trades the main purpose? if it is, the tax should be higher or not done at all. If the tax is to change the HFT behavior that harms the marketplace...will .003% accomplish that? The money should be ear marked strictly for national debt payment however. I am a much bigger fan of this kind of consumption/transaction tax than I am of income/property taxes.

cincybearcat

mikepegg44 wrote:

the amount of money raised isn't that large all things considered, do you think this will do more to help curb the HFT behavior? is .003 enough to do that?

The reason I ask is simple...is the tax money made off of the trades the main purpose? if it is, the tax should be higher or not done at all. If the tax is to change the HFT behavior that harms the marketplace...will .003% accomplish that? The money should be ear marked strictly for national debt payment however. I am a much bigger fan of this kind of consumption/transaction tax than I am of income/property taxes.

Good questions. And I agree with you about consumption/transaction taxes. I also agree that this would likely to be higher to curb the behavior. I think there is probably a "sweet spot" though and I'm leaning towards being in big time favor of this....and to make it a higher %.

brianlux

I don't see a problem with this but then I've never owned stock so maybe that's a cop out on my part.

Another idea I've heard is this- no tax on necessities but tax everything else. Not sure how that would work but the proponents seem to think it's a great idea.

Johnny Abruzzo

HFT's would figure out a way to avoid it. How can there be a "global tax?" :?

DriftingByTheStorm

mikepegg44 wrote:

The reason I ask is simple...is the tax money made off of the trades the main purpose? if it is, the tax should be higher or not done at all. If the tax is to change the HFT behavior that harms the marketplace...will .003% accomplish that? The money should be ear marked strictly for national debt payment however. I am a much bigger fan of this kind of consumption/transaction tax than I am of income/property taxes.

I'm not sure ANY amount of tax would be enough to eliminate HFT or significantly reduce it. Unless it was like 50%.

Truthfully, taxes are NOT supposed to be levied by the US Federal Government to CHANGE BEHAVIOR. They are generally accepted to only be valid FOR RAISING REVENUE period. This is not in the constitution, but is accepted at a court\judge level. I have a friend who is a federal lawyer, who actually doesn't see anything wrong with the Obamacare "tax", even though he acknowledges that taxes are to be laid TO RAISE REVENUE ***ONLY***, and not to alter public behavior. I'm not sure how\why this is ignored, or where it is even explicitly stated for folks like my lawyer friend to be aware of. So just FYI about the "validity" of disuading behavior with taxes. US Gov AINT supposed to be doing it.

But in THIS situation, probably THE ONLY situation i approve of it because there is SOOOO much money in the world (especially available to those who own the HFT machines) that it no longer functions as "money", but only as a store of political power. IN other words if all the money in the world was dumped on the table, the cost of everything in the world would probably go up 10 fold (or more) ... only as a STORED WEAPON OF POWER does all the money in the world function as it currently done. Given that MOST of this money is under the control of those that own the HFT machines, i find it PERFECTLY fitting for them to be TAXED OUT THE ASS on such bullshit transactions.

I may be called a hypocrite for this, but the HFT machines\algos are (imho) THE biggest threat to REAL markets and deserve to be taxed in to oblivion.

I'm not sure how "HFTs would figure out a way to avoid it", the exchange or brokerage they operate through is going to be on the hook to report those transactions. Since they are automated they should be automatically reported, as well> But i have NO idea how those machines really work. I wish someone would "fight club" them all though.
:(

DriftingByTheStorm

I think this is an interesting article both in relation to Obamacare AND this tax.
The ‘Taxing Clause’, Five Lawless Judges, and ObamaCare

Johnny Abruzzo

There are tons of taxes (or deductions/credits) designed to encourage behavior.

-Mortgage Interest Tax Deduction
-Charitable Donations
-Electric Car Tax Credits
-Tax Credits for efficient-izing your home

Whether or not you agree with these taxes, they are definitely designed to influence behavior.

DriftingByTheStorm

Johnny Abruzzo wrote:

There are tons of taxes (or deductions/credits) designed to encourage behavior.

-Mortgage Interest Tax Deduction
-Charitable Donations
-Electric Car Tax Credits
-Tax Credits for efficient-izing your home

Whether or not you agree with these taxes, they are definitely designed to influence behavior.

i didn't say there WEREN'T any,
i said that even government lawyers seem to know that there are NOT SUPPOSED TO BE any.
Again, like i said, i do NOT know what the origin of that understanding is. Unless it is coming from A1S8 itself, "to pay the Debts and provide for the common Defence and general Welfare" and "to be uniform", but i'm not sure.

I just know my Federal Lawyer buddy put it explicit to me that taxes are NOT SUPPOSED TO BE created for ANY purpose except to collect revenues.

The exact language, from a private facebook with this GAO lawyer,
"There are other judicial limits to the taxing power that are not found in the constitution. For example, the tax cannot be a criminal penalty in disguise; the tax must be designed to generate revenue, rather than just influence behavior." ... i have just asked him for clarification on from WHENCE this "judicial limit" is derived.

To be continued...

DriftingByTheStorm

Here is his full response:

A Government Lawyer wrote:

When I said judicial limits, I meant case law that has in the past struck down taxes that were designed solely to penalize behavior and not to raise revenue. Roberts talks about those previous cases in his opinion. Basically the view is that assessing a tax for punitive reasons is an attempt to exercise a general police power that the federal government lacks (unless it is tied to an enumerated power), but if a tax is designed to raise revenue, it's fine even if it will affect behavior. The argument is basically, at a certain point a tax ceases to be a tax (either because of the way it is administered, the targets of the tax, or the nature of the penalty) and starts to become more like a criminal fine.

The government's argument all along has been that the mandate would raise substantial revenue, and the court agreed on that point, taking it out of the "tax as criminal penalty" line of cases. To summarize, the limit is not in the text of the constitution, but it is a well-established part of our constitutional law (I learned about the cases in law school, Roberts talks about them in the opinion, they've been grounds for invalidating laws in the past, they're out there as a limiting principle).

I would argue that Roberts & the entire supreme court are WOEFULLY ASTRAY of their own alleged principles on this case (Obamacare), because the INTENT of the law is CLEARLY TO AFFECT BEHAVIOR.

***CLEARLY***

satansbed

It would be a good thing but i think it would need to be brought in in europe and the uk in addition to the states if it where to work

mikepegg44

DriftingByTheStorm wrote:

mikepegg44 wrote:

The reason I ask is simple...is the tax money made off of the trades the main purpose? if it is, the tax should be higher or not done at all. If the tax is to change the HFT behavior that harms the marketplace...will .003% accomplish that? The money should be ear marked strictly for national debt payment however. I am a much bigger fan of this kind of consumption/transaction tax than I am of income/property taxes.

So just FYI about the "validity" of disuading behavior with taxes. US Gov AINT supposed to be doing it.

When has that ever stopped them?

cincybearcat

mikepegg44 wrote:

DriftingByTheStorm wrote:

mikepegg44 wrote:

The reason I ask is simple...is the tax money made off of the trades the main purpose? if it is, the tax should be higher or not done at all. If the tax is to change the HFT behavior that harms the marketplace...will .003% accomplish that? The money should be ear marked strictly for national debt payment however. I am a much bigger fan of this kind of consumption/transaction tax than I am of income/property taxes.

So just FYI about the "validity" of disuading behavior with taxes. US Gov AINT supposed to be doing it.

When has that ever stopped them?

What about the taxes on cigarettes, etc?

Johnny Abruzzo

I'm confused. Where is the part that says a tax is not supposed to influence behavior, besides what the "Government Lawyer" said?

mikepegg44

Johnny Abruzzo wrote:

I'm confused. Where is the part that says a tax is not supposed to influence behavior, besides what the "Government Lawyer" said?

I suppose the "part" in reference refers to the non-enumerated power of prohibitive taxes. There really hasn't been a limit put on it since the early 1900's however. I suppose some could argue that a penalization tax (for lack of a better term at the moment) is covered in the general welfare clause. Interestingly enough, I think the purpose of all taxes isn't to eliminate behaviors at the federal level, it is all about making more money on top of common behaviors. If they truly want to discourage something they have about 900 regulatory bodies for that.

DriftingByTheStorm

Johnny Abruzzo wrote:

I'm confused. Where is the part that says a tax is not supposed to influence behavior, besides what the "Government Lawyer" said?

"Where is the part" ?

The part in what, in the SC ruling on Obamacare (National Federation of Independent Business v. Sebelius)?

in the constitution?

in my post?

I quoted you a PM from my friend where he does his best to explain his assertion.

It is NOT in the constitution,
but is apparently a well understood point of law within the judiciary.
Taxes can be laid which would have the affect of influencing behavior,
so long as the primary purpose of the tax is to collect revenue, that there is significant revenue, and that the tax at the personal level is not so severe as to act (in function) as a PENALTY against that behavior.

The term "penalty" shows up 118 times in the Obamacare Ruling, and i'm not even going to bother trying to work with Roberts to explain that, because I don't believe half of what came out on paper in that opinion in the first place.

If you want to get at my gripe with ANY flavor of an income based tax, you're best to start with Tom Cryer's memorandum (RIP, recently deceased patriot!) ... more succinctly than anyone else (he was able to get a jury of 12 to find him NOT GUILTY of willful failure to file taxes, and GOT THE IRS TO DROP ITS PENDING CASE AGAINST HIM FOR "TAX EVASION" ... hmmmm!) Cryer expresses USING THE SUPREME COURTS OWN DECISIONS, how the income tax IN GENERAL laid upon personal incomes in exchange for labor ARE NOT TAXABLE UNDER THE CONSTIUTION. (even CONSIDERING the 16th amendment, and he shows this QUITE CLEARLY)

IF you are asking me to clarify the notion of taxes not being intended to modify behavior and only to collect revenue, i will admit that i can NOT.
I just mentioned this as a point of note, since my friend who is quite a competent lawyer (and who regularly sides with the government -- hell he has argued with me ad infinitum that the SC is essentially correct in its ruling on Obamacare, and that while I may have some points, the SC does not recognize those points) noted that taxes, per his own understanding of judicial convention are not supposed to be designed for the PURPOSE of penalizing behavior but for the PURPOSE of raising revenues. (ie. i guess that means the tax on a pack of cigarettes can not be $1000) ...

I dunno.
:?: