In the last few weeks have seen some details of a plan to tax the sale of financial assets and are not good news for traders. While the proposed tax rate is only 0.25% of the value of transactions, could be a high cost for intraday traders to perform many operations. Imagine the case of a futures trader who had moved their operations to an amount equivalent to $ 10 million, in which case the end of the year, must pay $ 50,000 regardless of whether they won or lost. In this way, the tax to a particular trader with $ 25,000 in the account you would have to stop operations and leave the business. Taxation would be provided for all types of financial assets, including shares, options and futures. Carried out would end the most brokers and the associated industry: real-time data, systems, courses, etc..
The proposal for this new tax appeared in the autumn of 2008, within the first package of measures in the first Troubled Asset Relief Program (TARP), but at that time the proposal was not too successful and it also means paying too much attention .
The main advocate of this tax, the economist Dean Baker, co-director of the Center for Economic and Policy Research, enemy of financial speculation, to which responsibility for the current situation, and very critical of the policy pursued by Henry Paulson and the Bush administration. This expert in macroeconomics notes in his blog, Beat the Press, that the trading should be treated in a similar way to casino gambling, it should be burdened with taxes to curb speculation and to help fill the coffers of the Treasury .
The problem is to levy a tax equivalent trading, snuff, alcohol or gambling. But in reality, the trading has nothing to do with it quite the opposite: the traders meet the core mission of providing liquidity to the system so that those investors with a longer perspective may find counterparties for their operations, in fact Many traders buy when the market intraday low and sell when the market rises helping to stabilize the market.
Obviously though again to present the proposal, it will not be easy to obtain approval of the measure are all of Wall Street financial lobby against. And while certainly forward the aim (fatten the coffers of the State) would not be achieved. Glenn Hubbard of Columbia University says the reasons for which this tax will end up being a failure: on the one hand, it would be a complex tax scheme to implement, the response of traders would certainly stop operating so that the collection would not be as large as expected, the U.S. financial markets would cease to be internationally competitive, the tax would be supported in the same way by people of different income levels which would make the tax regressive, and finally, this tax would introduce an additional distortion within the free market.
However, although the chances of approval are remote, the fact is that the public and media consider the traders responsible for the current crisis and that puts pressure for the government. In fact Bob Herbert, from his column in The New York Times echoed the ideas of Baker trying to traders as parasites chupasangre, ensuring that this tax would serve to discourage the practice of this activity is not productive. And of course the recent scandals with Ponzi schemes, Madoff with the head, do not help much.
This news adds to the proposal made by the FINRA few weeks ago to reduce the leverage of forex brokers to 1.5:1, which is yet to see if they approve and will not affect the main dealers in the sector because are registered with the NFA and CFTC and not in that body. This measure aims to protect customers of such brokers, but it surely would if carried into practice is to penalize brokers registered with that agency and that customers are going to negotiate with foreign brokers.
In any case, it seems that the rules could change. We will have to be careful ...
(Extracted from an article published in the Spanish forum X-Trader, which I think is very interesting)
