All about taxation

[Cardboard]

and raising government revenue. Never about solving true problems.

 

I did put this into the General Section since I think all these policies will really start to affect all of us no matter where you stand in the political spectrum.

 

https://finance.yahoo.com/news/lawmakers-introduce-bill-to-tax-wall-street-211353714.html

 

We already pay a SEC fee on every sale in the U.S. to go after bad actors. How much more is needed to solve that problem of enforcement?

 

My view is that much more severe penalties surrounding insider trading are needed. Not more money for agencies or the government.

 

And what about going after those who front run us when we buy something? I don't think that more money will address that either.

 

Cardboard

[Gregmal]

Any way they can steal from people they will

[Spekulatius]

I am in favor of a small transaction tax. The main benefit for the small investor would be that it penalizes these HF trader leaches and hopefully puts them out of business. I believe that this would help the market transparency. I have no idea if the 0.1% transaction tax would do that , but I would support any tax that is just high enough to get rid of HF traders.

[Cardboard]

If you want to level the playing field why not first having everyone trade under the same rules?

 

In similar increments for example? I can't enter a trade in 1/2 cent for most stocks or priced above $0.50. However, I can never do 1/4 of a cent while the big boys can. They do thousands of a cent! No more bid and ask spread of 1/8? LOL!

 

In Canada, we even have a manipulative system or trades going through multiple exchanges while only TSX trades are recorded on the tape for close. Works wonder to manipulate charts and technicals.

 

It is not more money that is needed but, better rules.

 

 

[Spekulatius]

If you want to level the playing field why not first having everyone trade under the same rules?

 

In similar increments for example? I can't enter a trade in 1/2 cent for most stocks or priced above $0.50. However, I can never do 1/4 of a cent while the big boys can. They do thousands of a cent! No more bid and ask spread of 1/8? LOL!

 

In Canada, we even have a manipulative system or trades going through multiple exchanges while only TSX trades are recorded on the tape for close. Works wonder to manipulate charts and technicals.

 

It is not more money that is needed but, better rules.

I totally agree. I also have been outbid by fractions of a penny. I think a small tax that introduces enough friction costs for them to go away would help some more.

[rb]

If you want to level the playing field why not first having everyone trade under the same rules?

 

In similar increments for example? I can't enter a trade in 1/2 cent for most stocks or priced above $0.50. However, I can never do 1/4 of a cent while the big boys can. They do thousands of a cent! No more bid and ask spread of 1/8? LOL!

 

In Canada, we even have a manipulative system or trades going through multiple exchanges while only TSX trades are recorded on the tape for close. Works wonder to manipulate charts and technicals.

 

It is not more money that is needed but, better rules.

I totally agree. I also have been outbid by fractions of a penny. I think a small tax that introduces enough friction costs for them to go away would help some more.

I agree. A transaction tax will blow away the cockroaches. I'm in favour of even more than 0.1%. Do you want to incentivize investment or speculation?

[sarganaga]

I don't think a transactions tax will do anything to help the small investor, just transfer more money to a rapacious government to waste. For those of you who are in favor of a this type of tax, if it negatively effects volume, how much do you think commissions will go up?

[John Hjorth]

Just for information here, France already has such a thingy.

[writser]

I am in favor of a small transaction tax. The main benefit for the small investor would be that it penalizes these HF trader leaches and hopefully puts them out of business. I believe that this would help the market transparency. I have no idea if the 0.1% transaction tax would do that , but I would support any tax that is just high enough to get rid of HF traders.

 

I strongly think that's a horrible idea and I've been operating in markets where they work with this shit. Do you really think such a tax would mean HF traders suddenly will start losing money overnight? Nah, they just update their computer models to take into account transaction taxes. Everybody will still be doing the same trades, but only if they are slightly more profitable.

 

I mean, I sincerely like the thought behind the idea, but in reality such a program inevitably ends up as a tax on savers (i.e. you and your pension fund), not a tax on Wall Street. Your pension fund calls Goldman to buy Google, they will just give the price they gave yesterday but with transaction tax costs added on top. Same thing will happen when you buy Berkshire shares through IB from a high-frequency trader. Do you really think the intermediaries will take on the burden if they can pass it on to the sucker? Sure, it will cost them something but it will cost investors more. A different solution is required. Or an even more extreme viewpoint: is a solution actually required? What is the problem?

 

I guess we can thank Michael Lewis for pushing stupid ideas like this.

[Spekulatius]

I don't think a transactions tax will do anything to help the small investor, just transfer more money to a rapacious government to waste. For those of you who are in favor of a this type of tax, if it negatively effects volume, how much do you think commissions will go up?

 

A lot of the volume comes from  HF traders  scalping for pennies and they have a direct plugin to the exchange and don’t trade through brokerage like we do. They also seem to have special rules that they can bid in smaller increments than the average investor, increasing their ability scalp. I do deal with low volume stocks where these shenanigans are more obvious. You put in an order for 100 shares of XXX and then you get 10 shares (To Name an example) of XXX and the bid and ask instantaneously moves. It’s not another human doing it, but a trading bot for sure. These things get really old. If there are other ways to get rid of these shenanigans I am all for it.

 

The way I see it, the aggregate profits from all these HF traders come from investors pockets. Aas long as the sum of these taxes or fees paid is lower than the aggregate profits from HF traders, then it’s a net benefit for the investors. I think this all started when the e changes realized, that they can make more money serving the HF, than from serving their originally mission to facilitate trades amongst investors.

[Gregmal]

In other tax related news, Bryce Harper wanted to go to the Giants, but passed because of the atrocious tax burden California politicians are imposing upon residents.

 

https://www.yahoo.com/finance/news/aoc-effect-california-high-taxes-235930772.html

[meiroy]

wrister,

 

you're saying that if for example, HFTs used 0.1 spreads now they will simply go for 0.2, and as all the HFTs will simply increase the spread it won't make much difference?

 

What about taxing trade cancellation even with the intent of purchase (i.e. it was not spoofing)?

[Hielko]

If you want to level the playing field why not first having everyone trade under the same rules?

 

In similar increments for example? I can't enter a trade in 1/2 cent for most stocks or priced above $0.50. However, I can never do 1/4 of a cent while the big boys can. They do thousands of a cent! No more bid and ask spread of 1/8? LOL!

 

In Canada, we even have a manipulative system or trades going through multiple exchanges while only TSX trades are recorded on the tape for close. Works wonder to manipulate charts and technicals.

 

It is not more money that is needed but, better rules.

I totally agree. I also have been outbid by fractions of a penny. I think a small tax that introduces enough friction costs for them to go away would help some more.

I agree. A transaction tax will blow away the cockroaches. I'm in favour of even more than 0.1%. Do you want to incentivize investment or speculation?

How much do you think a HFT firm makes if they are the counterparty to one of your trades? They probably make less than a $0.01/share. So now you want to add a 0.1% tax or higher? Really??? So instead of maybe "losing" a cent to a HFT trader you will be paying something like 10 times as much in taxes?? Great... that will really make things better.

 

Not saying that the market structure can't be improved in the US, but adding transaction taxes is something like shooting yourself so you won't get robbed... maybe it works, but the end result isn't necessarily better.