Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Plan would include a 0.1% tax on all stock transactions.
I'm not keen on paying 10 basis points every time I rebalance or contribute funds. I don't feel like I'm a "Wall Street big shot". This tax would likely continue forever, and increase over time (as most taxes do).
Not a good idea. While this is in other countries, it's really not something that I would want. I'm sure, however, the Wall St lobby will take care of this.
Yes Scott, you're right in that Wall Street would obviously have a serious objection to this and since they are pretty well intertwined in both parties, I don't see this gaining much traction.
In fact, it's a non-starter while the Republicans control both houses of congress.
It will however, likely be a rallying cry and reintroduced periodically by Democrats.
Worth watching.
There's certainly a wage problem in the US, but one thing is for certain, politicians will probably both their response and find any new legislation would produce the exact opposite of what is intended.
It's an entire package including tax cuts for the middle class and tax incentives for corporations to raise worker pay: all the details here at the WaPo.
From the WaPo article; "The windfall — about $1.2 trillion over a decade — would come directly from the pockets of Wall Street “high rollers” through a new fee on financial transactions, and from the top 1 percent of earners, who would lose billions of dollars in lucrative tax breaks."
Who are they calling "high rollers"? The middle class retail investor just trying to save up a kitty for the future? With interest rates at zero and below, the money has been going into funds and other investments in order to capture some growth.
Did you read the story John? You ask are the high rollers middle class retail investors? No, the story describes them as those making $1.4 million+ a year. The proposal as I read it is trying to give financial breaks back to the middle class. The problem here isn't that we trash the rich. That is a popular slogan started by the rich. If you haven't noticed, the rich are getting very much richer as the middle class deteriorates. That is a fact.
Just in a recent post here on MFO, there was discussion about average pay being lower then the past and how that hurts the economy. Hmm, so in whose pockets are record profits going then? Put it together, it's a fact the split between the rich and middle class has grown exponentially over the last decade or two. I'd say politics and tax loop holes are totally swayed for the rich guy, not the middle class.
I don't know if this is a good bill or not. I'm positive Republicans will kill it, only for the fact a Democrat suggested it. Killing it is also stated in the article.
No answer here, but it always fascinates me that people who will complain that the middle class is disappearing will defend the status quo that the rich and their pocket-politicians have put in place.
I admit I did not read the entire article. That paragraph turned me off to the rest of the writing.
I worry about the definition of rich. Think about this theoretical scenario. MikeM's son graduates from college and lands a good job with a decent salary. His parents have taught him from early on to be a saver and he listened carefully. He maxes out his tax deferred options with the company and has personal accounts where he invests his money. Fast forward twenty or so years and he has done very well thanks to his discipline of saving for the future. But, the government says whoa, hold up there son. You are now rich. So you are going to have to pay some extra fees and whatever. It goes against the idea of personal responsibility.
Meanwhile, the government expands social programs for those that are having a hard time getting by. These programs used to be a way to pull a person or family up until they could get back on their feet. Now they are lifestyle programs. They have been expanded to include more citizens and those who are just living here. That of course drives up costs and the money has to come from somewhere. Enter the rich people.
I have no issues with helping people out but the social programs of today go way beyond that. Consider also that a large percentage of households are now partaking of one or more of these programs. It furthers the balkanization of society. The haves and the have nots. Rich and poor.
We are developing a new class of residents. The government class.
I don't think it is a issue of helping people out. I think it's the issue that a middle class person can't make a wage that keeps them in the middle class. Hence, more people needing help, people living pay check to pay check trying to do the right thing but falling behind. People one illness or economic disaster away from falling off the economic cliff. There are more and more of those people that can't get ahead of the game.
And then, yup, enter the rich people. If the game plays out where the divide between rich to middle class and poor keeps expanding, where else do you go? The rich reap the benefits of a game ruled in their favor. So, status quo.
Most people will say as you do,
I have no issues with helping people out...
. And I do
...consider a large percentage of households are partaking of one or more of these programs.
They are falling into those programs because of the rich to poor divide. And my point is that the political-economic rules that are in place to benefit the rich is exactly what sets up a society needing special government programs for those once part of the middle class. Kind of self perpetuating.
That "new class of residents" aren't there because they want to be - they are there by circumstances of the game in my opinion.
That "new class of residents" aren't there because they want to be - they are there by circumstances of the game in my opinion. Quote Mikem
Sorry, but I never met a person who WANTED to get out of his "circumstances", that couldn't do it, and circumstances of the Game" couldn't stop them, and Government programs didn't help them, no matter what Obama says "you didn't do it by yourself, we helped"..... sorry Obama an insult to Smart/hard working People, we didn't need or get your (Gov.) help, we did it Our (American) way
Derf, I think it's stocks and derivatives such as options, mutual funds, futures, etc.
Again, it's not just the 10 basis point fee, but anyone that understands how management fees can reduce your compounded return will realize how an additional tiny fraction here and there (rebalances and monthly purchases, etc) will reduce your number over the course of years of saving.
I won't stoop to your level by acronym insults. If that is what you need to do to get a point across, I would suggest returning to Marketwatch as the troll. Cartoon characters were your specialty.
I am out of this thread. Thanks to those who commented in a civil and polite manner.
davidrmoran: good points, but yes, one should always stay polite.
This tax would probably actually reduce costs for people like us, by reducing the presence of high-frequency trading, which generally prevents big investors (like the actively-managed mutual funds most of us invest in) from making big purchases/sales without manipulating prices.
davidrmoran: good points, but yes, one should always stay polite.
This tax would probably actually reduce costs for people like us, by reducing the presence of high-frequency trading, which generally prevents big investors (like the actively-managed mutual funds most of us invest in) from making big purchases/sales without manipulating prices.
expatsp, I'm a little confused on your statement. Are you saying that lower trading volumes will help mutual funds? Maybe you can elaborate on why.
Financial transaction taxes are nothing new. Here is the definitive study on the matter.
Generally financial transaction taxes reduce trading volumes and bid/ask spreads, which leads to MORE market manipulation, not less.
'Crudman' is 'staying polite'? I was suggesting that staying on point and informed was a better idea than spouting without knowing what. Pardon me. The best thing about NYT expert columns (usually) is how heavily substantiated and documented they are.
clacy, thanks for that article; I too thought I had read that xaction fees helped modulate HF trading.
My thought was that HFTs, by front-running, drive up prices for investors making big purchases, but there's a lot of controversy about that and it seems I was wrong.
Comments
In fact, it's a non-starter while the Republicans control both houses of congress.
It will however, likely be a rallying cry and reintroduced periodically by Democrats.
Worth watching.
There's certainly a wage problem in the US, but one thing is for certain, politicians will probably both their response and find any new legislation would produce the exact opposite of what is intended.
Who are they calling "high rollers"? The middle class retail investor just trying to save up a kitty for the future? With interest rates at zero and below, the money has been going into funds and other investments in order to capture some growth.
Of course, it's popular today to trash the rich.
Just in a recent post here on MFO, there was discussion about average pay being lower then the past and how that hurts the economy. Hmm, so in whose pockets are record profits going then? Put it together, it's a fact the split between the rich and middle class has grown exponentially over the last decade or two. I'd say politics and tax loop holes are totally swayed for the rich guy, not the middle class.
I don't know if this is a good bill or not. I'm positive Republicans will kill it, only for the fact a Democrat suggested it. Killing it is also stated in the article.
No answer here, but it always fascinates me that people who will complain that the middle class is disappearing will defend the status quo that the rich and their pocket-politicians have put in place.
I worry about the definition of rich. Think about this theoretical scenario. MikeM's son graduates from college and lands a good job with a decent salary. His parents have taught him from early on to be a saver and he listened carefully. He maxes out his tax deferred options with the company and has personal accounts where he invests his money. Fast forward twenty or so years and he has done very well thanks to his discipline of saving for the future. But, the government says whoa, hold up there son. You are now rich. So you are going to have to pay some extra fees and whatever. It goes against the idea of personal responsibility.
Meanwhile, the government expands social programs for those that are having a hard time getting by. These programs used to be a way to pull a person or family up until they could get back on their feet. Now they are lifestyle programs. They have been expanded to include more citizens and those who are just living here. That of course drives up costs and the money has to come from somewhere. Enter the rich people.
I have no issues with helping people out but the social programs of today go way beyond that. Consider also that a large percentage of households are now partaking of one or more of these programs. It furthers the balkanization of society. The haves and the have nots. Rich and poor.
We are developing a new class of residents. The government class.
And then, yup, enter the rich people. If the game plays out where the divide between rich to middle class and poor keeps expanding, where else do you go? The rich reap the benefits of a game ruled in their favor. So, status quo.
Most people will say as you do, . And I do They are falling into those programs because of the rich to poor divide. And my point is that the political-economic rules that are in place to benefit the rich is exactly what sets up a society needing special government programs for those once part of the middle class. Kind of self perpetuating.
That "new class of residents" aren't there because they want to be - they are there by circumstances of the game in my opinion.
Sorry, but I never met a person who WANTED to get out of his "circumstances", that couldn't do it, and circumstances of the Game" couldn't stop them, and Government programs didn't help them,
no matter what Obama says "you didn't do it by yourself, we helped"..... sorry Obama an insult to Smart/hard working People, we didn't need or get your (Gov.) help,
we did it Our (American) way
Derf
Exactly.
Again, it's not just the 10 basis point fee, but anyone that understands how management fees can reduce your compounded return will realize how an additional tiny fraction here and there (rebalances and monthly purchases, etc) will reduce your number over the course of years of saving.
Poor level of discourse. RTFA, and the below too.
See if you might thoughtfully find some things about it that sound positive.
http://www.marketwatch.com/story/transaction-tax-plan-brings-fresh-wall-street-battle-to-capitol-hill-2015-01-12
+1 to MM and AJ
I won't stoop to your level by acronym insults. If that is what you need to do to get a point across, I would suggest returning to Marketwatch as the troll. Cartoon characters were your specialty.
I am out of this thread. Thanks to those who commented in a civil and polite manner.
This tax would probably actually reduce costs for people like us, by reducing the presence of high-frequency trading, which generally prevents big investors (like the actively-managed mutual funds most of us invest in) from making big purchases/sales without manipulating prices.
Financial transaction taxes are nothing new. Here is the definitive study on the matter.
Generally financial transaction taxes reduce trading volumes and bid/ask spreads, which leads to MORE market manipulation, not less.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1980185
clacy, thanks for that article; I too thought I had read that xaction fees helped modulate HF trading.
My thought was that HFTs, by front-running, drive up prices for investors making big purchases, but there's a lot of controversy about that and it seems I was wrong.