Financial Transaction Tax, Anyone?

[SnerpGoodWord]

Originally Posted by Beingist

Right. Another fact. Boggles the mind, your brilliance, Snerp.

What are you getting at here? Are you arguing that it's feasible to charge investors who are holding an investment with a 2% yield almost 5% in annual taxes, and that this will just somehow work out?

It doesn't take a lot of heavy math to realize the situation is untenable.

[Beingist]

Originally Posted by SnerpGoodWord

What are you getting at here? Are you arguing that it's feasible to charge investors who are holding an investment with a 2% yield almost 5% in annual taxes, and that this will just somehow work out?

No.

[SnerpGoodWord]

Then why the snark?

[Beingist]

Originally Posted by SnerpGoodWord

Then why the snark?

Well, because you said here--

Originally Posted by SnerpGoodWord

I'll keep stating the facts and we'll go from there.

But, if you'll notice, you tend to add rather rude remarks to your facts, which themselves, aren't facts.

Facts often speak for themselves, and I don't question yours. It's just the arrogant, rude, and unnecessarily judgmental remarks that follow that I simply think are unnecessary.

[SnerpGoodWord]

Basically you know I'm precisely right but you have to be butthurt about it because you dislike me. Got it

[Beingist]

Originally Posted by Peterw

I agree with the principle of getting money out of the financial system and redistributing it to those who need it but this isn't the way to do it.

This is about where I'm at.

In all honesty, I'd just like to see the whole tax cod tossed out for it's complexity, and replaced with something simple and fair. As I see it, this seems fair, but only in theory. Practically, it seems it would have the opposite effect, as the Sweden example shows.

[Beingist]

Originally Posted by SnerpGoodWord

Basically you know I'm precisely right but you have to be butthurt about it because you dislike me. Got it

Right, another remarkable fact. Your brilliance is stunning, Snerp. Seriously.

[Peterw]

Originally Posted by Curtis2011

In general I am against new taxes, whatever form they may take.

IMO, if the government can't spend within its means while taking in 2.6 trillion dollars a year in revenue, then giving them more money is not going to fix the problem.

I'm in this camp as well. The answer to government's inability to manage their finances sensibly is not to give them more money.

Also the answer to massive excesses in the finance industry vs horrendous poverty in other parts of the world and inequality in developed nations is not to give more money to governments.

IMO not nearly enough press is given to the philanthropic activities of financial institutions and the charitable activities of the rich. It's an inconvenient truth that a lot of people either filter out just aren't aware of, probably due to media reporting.

[JDuff]

I personally think that, from a moral standpoint, it is essential that the perpetrators of the financial crises repay governments and thereby citizens for the massive costs they have effectively forced upon us. Therefore, as well as a tobin tax, there should be other measures like separating deposit banking from the gambling which predominately caused the problems in the first place.

But as people above have highlighted, there are real practical concerns about such policies. For example, what the extra money will be used for, what will happen if it is applied only in isolated areas, etc.

As a consequence, I think it needs to be levied globally. Secondly, whilst particular governments may be wasteful spenders, they do spend (supposedly) for the benefit of citizens. The super rich and the banks do not, and more money for them will only go in bonuses to the very people who have caused these massive problems. Or it will go to shareholders who are supporting and endorsing the ponzi-schemes that these people operate.

[Peterw]

Originally Posted by JDuff

I personally think that, from a moral standpoint, it is essential that the perpetrators of the financial crises repay governments and thereby citizens for the massive costs they have effectively forced upon us. Therefore, as well as a tobin tax, there should be other measures like separating deposit banking from the gambling which predominately caused the problems in the first place.

But as people above have highlighted, there are real practical concerns about such policies. For example, what the extra money will be used for, what will happen if it is applied only in isolated areas, etc.

As a consequence, I think it needs to be levied globally. Secondly, whilst particular governments may be wasteful spenders, they do spend (supposedly) for the benefit of citizens. The super rich and the banks do not, and more money for them will only go in bonuses to the very people who have caused these massive problems. Or it will go to shareholders who are supporting and endorsing the ponzi-schemes that these people operate.

I think most of the banks have paid back their bailouts or the governments are sitting on the equity they bought for now. I know if I bought however many billions of bank shares back in 2008 at the absolute bottom I'd still be holding.

The crisis we're heading into now is being caused by irresponsible government spending. Merkel and Sarkozy are pushing this tax as a means to get funds to prop up the EURO so they can continue to bail out the governments of Greece, Italy, Portugal, Spain and Ireland.

Greece has a retirement age of 55, something like over 50% of the work force are employed by the state, there are more Porshes registered in Greece than there are taxpayers who earn over 50,000 euros a year. And Italy.... you've probably seen the headlines about what Berlusconi gets up to.

Europe is a big mess because you've got highly efficient and competitve economies (Germany) lumped in with extremely inefficient, corrupt and uncompetitve economies (PIIGS) all under the same currency. Now the problems are starting to surface and they need big help to stop it all going down the pan.

I do agree that customer deposits need to be separated from proprietary speculating though. I think this might already be happening in some places.

[Beingist]

Originally Posted by Peterw

Also the answer to massive excesses in the finance industry vs horrendous poverty in other parts of the world and inequality in developed nations is not to give more money to governments.

This is part of the problem I have, but another part is something Smerp mentioned, somewhere between his derisive commentary--

Such a tax would, I think, all but eliminate the middle class investor. As one who once had a single-ladder Air Conditioning company, I was one of those who was basically squeezed out of business by the law that mandated all the refrigerant recycling equipment. That took a significant chunk of capital that I simply didn't have. Such would be the same, I think with this tax. If enacted, the only ones who could continue to compete are the big-money corporations, while the guy doing the day trading is basically screwed. In that light, it seems truly counterproductive.

IMO not nearly enough press is given to the philanthropic activities of financial institutions and the charitable activities of the rich. It's an inconvenient truth that a lot of people either filter out just aren't aware of, probably due to media reporting.

I know Bill Gates is somewhat of a philanthropist, but otherwise, I honestly think that charitable contributions are really more for the tax deduction than out of actual charity. And the reason I think this, is because if you took away the charitable contribution deduction, do you really expect contributes would be even close to what they are now?

[SnerpGoodWord]

Originally Posted by Beingist

I know Bill Gates is somewhat of a philanthropist, but otherwise, I honestly think that charitable contributions are really more for the tax deduction than out of actual charity. And the reason I think this, is because if you took away the charitable contribution deduction, do you really expect contributes would be even close to what they are now?

This doesn't make much sense - when you contribute to charity, the deduction effectively reduces your income by the amount of the contribution. Since income is fractionally taxes (30% or whatever), the amount of taxes you save is only a fraction of the size of the contribution. If one was trying to maximize wealth they would make no charity contributions whatsoever.

From an economic point of view, the charity contributions of the wealthy are in fact altruistic. The deduction simply makes them less expensive than they would otherwise be.

[Beingist]

Originally Posted by SnerpGoodWord

From an economic point of view, the charity contributions of the wealthy are in fact altruistic. The deduction simply makes them less expensive than they would otherwise be.

I'll believe that when I see the deduction removed, and contributions remain the same.

[Brutha]

If enacted, the only ones who could continue to compete are the big-money corporations, while the guy doing the day trading is basically screwed. In that light, it seems truly counterproductive.

The core question is:
What benefit does society get from the guy who's doing the day trading?

[Beingist]

Originally Posted by Brutha

The core question is:
What benefit does society get from the guy who's doing the day trading?

I wonder what benefit society gets from any trading?

[Peterw]

Originally Posted by Beingist

This is part of the problem I have, but another part is something Smerp mentioned, somewhere between his derisive commentary--

Such a tax would, I think, all but eliminate the middle class investor. As one who once had a single-ladder Air Conditioning company, I was one of those who was basically squeezed out of business by the law that mandated all the refrigerant recycling equipment. That took a significant chunk of capital that I simply didn't have. Such would be the same, I think with this tax. If enacted, the only ones who could continue to compete are the big-money corporations, while the guy doing the day trading is basically screwed. In that light, it seems truly counterproductive.

I know Bill Gates is somewhat of a philanthropist, but otherwise, I honestly think that charitable contributions are really more for the tax deduction than out of actual charity. And the reason I think this, is because if you took away the charitable contribution deduction, do you really expect contributes would be even close to what they are now?

Yeah I definitely don't want to be taxed out of building up my trading business. I think retail trading is way too lucrative for the brokers (and the taxes they pay) for governments to mess with that.

Buffet, Soros and some of the other big guys are quite known for their charitable/philanthropic work. The bank I work in at the moment (one of the major swiss investment banks) does more charitable stuff than any other company I've worked for.

I'm sure they could do more but I'm impressed with how much they do as it is. I know a lot of wealthy people use charitable giving as a way to lower their tax bills, it would be interesting to see if that were to change if it was no longer tax efficient.

I don't think it would because a lot of the wealthy people I know are very active with charity as they feel a sense of responsibility. It's interesting that when the need to make money to survive is removed from someone's life it's not uncommon for them to want to focus on helping others out of a sense of just wanting to.

This is just my personal experience from the financial institutions I've worked in and some of the very rich people I've been lucky enough to rub shoulders with. I know there are plenty of greedy hoarding types as well.

[Peterw]

Originally Posted by Brutha

The core question is:
What benefit does society get from the guy who's doing the day trading?

Originally Posted by Beingist

I wonder what benefit society gets from any trading?

Taxes?

Charities?

Surely a lot more benefit than the guy in the tent protesting against capitalism is giving

[Beingist]

Originally Posted by Peterw

Taxes?

They get taxes from everything and everyone already. How does trading increase that?

Charities?

Again, from companies making a ton of profit, perhaps, but how does trading help charities?

Surely a lot more benefit than the guy in the tent protesting against capitalism is giving

Well, see I'm still wondering about that.

[SnerpGoodWord]

Originally Posted by Brutha

The core question is:
What benefit does society get from the guy who's doing the day trading?

Assuming he's a liquidity-adding speculator (and it's unlikely his day trading will be profitable if he's not) then the benefit is increased liquidity. It's the same benefit you get from the grocery store when buying food - the option to buy the quantity you want, when you want, with the store taking the risks inherent is matching supply up to demand in an uncertain environment.

[Peterw]

Originally Posted by Beingist

They get taxes from everything and everyone already. How does trading increase that?
Again, from companies making a ton of profit, perhaps, but how does trading help charities?
Well, see I'm still wondering about that.

How does trading increase tax revenue? It's taxable already. IE - If I make £X/year from trading I pay £Y tax on it.

Traders donate to charities just as much if not more than anyone else.

Also if you have a pension or are invested in any funds who executes the transactions in those funds/pensions?

Why do so many poeple have it in for traders? Jeez..

Not just here, people get quite upset about the idea of traders making good money from short term transactions. What's the difference between a forex trader, a used car trader, a real estate trader or even a recruitment agent?

They're all buying and selling stuff that they didn't make/build/develop

Even affiliate marketers - why does Google hate them so much?

[Beingist]

Originally Posted by Peterw

Why do so many poeple have it in for traders? Jeez..

Not just here, people get quite upset about the idea of traders making good money from short term transactions. What's the difference between a forex trader, a used car trader, a real estate trader or even a recruitment agent?

They're all buying and selling stuff that they didn't make/build/develop

Even affiliate marketers - why does Google hate them so much?

This is a good question.

I once considered the day trading thing, and in fact, did it for a brief time. But, even though I got lucky on one particular transaction (I nearly tripled the investment), I really didn't know what I was doing, and since it was more on the side, I didn't really have the time to learn.

Not that being hated for being a day trader would have mattered to me back then, but I consider it now, simply because there's nothing being produced. Like any other kind of salesman, they just seem like people who are not to be trusted, who are trying to gain, but only at someone else's loss.

I wouldn't do it now, not because of all that, but because after studying history, I'm better able to relate the big day-trading surge to the pre-depression, 1920's, when virtually everyone was getting into the stock market, thinking that it couldn't do anything but go up. Thus, and because of other things (like fiat money), I think it's all gonna come crashing down, eventually, and only the ones with all the beans are gonna be spared.

[Peterw]

Billion Dollar Charitable Givers Dominated by Gates and Buffett

Forbes has released its most recent list of the world's biggest charitable givers. There are 19 people on the list who have already donated at least $1 billion to charitable causes

1.Bill Gates. Has given $28 billion through his Bill & Melinda Gates Foundation.

2.Warren Buffett has given $8.3 billion so far. Buffett and Gates are the movers behind the Giving Pledge as they try to convince the super wealthy around the world to pledge to giving away most of their fortunes either while still living or after their deaths. So far 69 have committed, including Mark Zuckerberg, founder of Facebook. and Michael Bloomberg, NYC Mayor and media tycoon.

3.George Soros, $8 billion in giving.

Now you can argue that Buffet isn't a 'trader' and is instead an 'investor' however he doesn't create of build anything himself, he buys things and sells them on for more money. Soros is definitely a trader.

The word 'trader' conjures up the image of the pinstriped Gordon Ghekko type but retail traders are quite different. Much like any little guy in any business.

[Peterw]

I think all these people judging "the rich" should do a bit of research on who they're judging and why they've got so much animosity toward them.

Where one person sees a rich person and feels anger, jelousy, resentment and a feeling of injustice another person might see achievement, and feel awe and respect for someone who's made it and is now in total control of their lives and making a difference.

Anyone who makes a great fortune and does good things with it is a role model to me - as long as they made their money legally and without exploiting anyone else.

Trading has winners and losers but that's part of the game, that's business, that's life. Even Joe widget maker is in competition with John widget maker. If Joe goes out and does a bit of marketing that takes a customer that would have gone to John - he's taking food off John's table isn't he?

Quick get the pitch forks - we got ourselves a lynchin'!

[Beingist]

Originally Posted by Peterw

I think all these people judging "the rich" should do a bit of research on who they're judging and why they've got so much animosity toward them.

Where one person sees a rich person and feels anger, jelousy, resentment and a feeling of injustice another person might see achievement, and feel awe and respect for someone who's made it and is now in total control of their lives and making a difference.

Anyone who makes a great fortune and does good things with it is a role model to me - as long as they made their money legally and without exploiting anyone else.

Trading has winners and losers but that's part of the game, that's business, that's life. Even Joe widget maker is in competition with John widget maker. If Joe goes out and does a bit of marketing that takes a customer that would have gone to John - he's taking food off John's table isn't he?

Quick get the pitch forks - we got ourselves a lynchin'!

I see your point, PW, and I agree. I grew up in a house full of Democrats who very much resented the more affluent. As I got older, I realized that my own resentments originated and were very much driven by that energy during my childhood, and I'm learning and understanding more, now, how even the more affluent can have their good qualities.

But, then, so does Joe Sixpack, who grinds it out on the production line for forty hours a week, and who now has to take on a second job, just to feed, clothe, and house himself and his family.

I don't feel the same "awe and respect" for either of them, frankly, because each has their own inherent faults. Affluence and ambition can lead to greed, while swearing by the working-class lifestyle can lead to resentments and class warfare sentiment. But, ultimately, we're all doing the best we can with what we've got to work with.

[Spinoza]

Originally Posted by Beingist

I wonder what benefit society gets from any trading?

Seriously? You don't see what benefit people get from trading?

Farmer A grows Apples

Farmer B grows Oranges

Farmer A trades 100 of his apples for a 100 of farmer B's oranges.

Now both farmers can enjoy consuming apples and oranges.

win-win

[Beingist]

Originally Posted by Spinoza

Seriously? You don't see what benefit people get from trading?

Farmer A grows Apples

Farmer B grows Oranges

Farmer A trades 100 of his apples for a 100 of farmer B's oranges.

Now both farmers can enjoy consuming apples and oranges.

win-win

Pfft. Silly.

Of course, I'm talking about stock trading. Moreover, I'm talking about how trading benefits society, not the traders themselves.

[Spinoza]

Originally Posted by Beingist

Pfft. Silly.

Of course, I'm talking about stock trading. Moreover, I'm talking about how trading benefits society, not the traders themselves.

Ah...you were talking about the middlemen. You don't see the benefit to society from traders C,D, and F before it gets from Farmer A to Farmer B.

Is that about right?

[Beingist]

Originally Posted by Spinoza

Ah...you were talking about the middlemen. You don't see the benefit to society from traders C,D, and F before it gets from Farmer A to Farmer B.

Is that about right?

No. Actually, I was looking for the benefit to society as a whole. Nothing is being produced, and there is no service to the general public. Even if you want to trade apples for oranges, who else benefits from the trade, except for the farmers who do the trading to begin with?

[Peterw]

Originally Posted by Beingist

No. Actually, I was looking for the benefit to society as a whole. Nothing is being produced, and there is no service to the general public. Even if you want to trade apples for oranges, who else benefits from the trade, except for the farmers who do the trading to begin with?

The end consumers and business who get to eat the traded apples and oranges and use them to make fruit salads.

Take a market trader for instance who buys the appples and oranges form farmers A and B then sells them on a stall to Joe (and John!) widget makers (who's widgets are fruit salads and smoothies). What value has the market trader provided to society? He hasn't made or produced anything..

I see your point about electronically trading financial securities as being 'empty' by the way. I have struggled with this aspect and come to the conclusion that it's a perfectly acceptable way for me to achieve my financial goals and live the life/purpose I want to. I enjoy it, I'm getting better at it and to me it is a source of unending wealth I can tap into.

As empty as it may seem I still pay taxes and as Snerp pointed out provide liquidity into the system that so many people use for their retirement and passive investment funds.

[Spinoza]

Originally Posted by Beingist

No. Actually, I was looking for the benefit to society as a whole. Nothing is being produced, and there is no service to the general public. Even if you want to trade apples for oranges, who else benefits from the trade, except for the farmers who do the trading to begin with?

So if something is produced that then that is a good to society as a whole?
Why is that?

What would be a list of things that individuals can do that are a benefit to society as a whole?