Adam Brooks
02-24-2009, 11:45 PM
It's called the financial transaction tax. What it does is add .25% to the total dollar amount traded in the stock, commodities and futures markets.
The theory behind this tax is to have "wall street" pay for the bailouts since "they got us into this mess". I will let you form your own opinion on that but that's not the point of me posting this.
What these guys don't realize is that the VAST majority of retirement accounts in the US are privately managed. There actually is a person behind the funds in which money is actively traded to the goal/investment blend of the fund itself. Tacking on a tax to every transaction made KILLS performance of the fund and totally screws with your retirements ability to grow.
A quick example of what that looks like on a small scale:
100 shares of stock in Apple, Inc (about 100 bux a share so 10k total trade) bought and sold would increase the cost of a round trip transaction by $50, which is a very large amount in a trading environment where fractions of a cent profit are the norm.
Now an investment fund may trade 50,000 shares of apple 50,000 * 100 - 5,000,000 a day. That's $12,500 in fn tax they want to sharge on that to BUY. to sell is another $12,500 making the total TAX charged on that trade round trip $25,000K, yes 25 grand on one trade. Guess who won't bennifit from the 25 grand you otherwise would have made. right, you wont. Not the traders, not wall street, not you, the government. No keep in mind when you pull money ouf of a 401K when you retire its taxed as income...... yet you were already taxed like a sob on the trades. Talk about double taxation.
To show you how out of wack this is, my broker would charge me .005/share, not by the dollar amount but per share so 50,000 shares costs 250 bux each way, 500 bux total. Now addd 25 grand to that!? gimmie a break
You can read more about this tax here: http://www.rallycongress.com/no2tradertax/1536/tell-congres-to-block-trader-tax/
The theory behind this tax is to have "wall street" pay for the bailouts since "they got us into this mess". I will let you form your own opinion on that but that's not the point of me posting this.
What these guys don't realize is that the VAST majority of retirement accounts in the US are privately managed. There actually is a person behind the funds in which money is actively traded to the goal/investment blend of the fund itself. Tacking on a tax to every transaction made KILLS performance of the fund and totally screws with your retirements ability to grow.
A quick example of what that looks like on a small scale:
100 shares of stock in Apple, Inc (about 100 bux a share so 10k total trade) bought and sold would increase the cost of a round trip transaction by $50, which is a very large amount in a trading environment where fractions of a cent profit are the norm.
Now an investment fund may trade 50,000 shares of apple 50,000 * 100 - 5,000,000 a day. That's $12,500 in fn tax they want to sharge on that to BUY. to sell is another $12,500 making the total TAX charged on that trade round trip $25,000K, yes 25 grand on one trade. Guess who won't bennifit from the 25 grand you otherwise would have made. right, you wont. Not the traders, not wall street, not you, the government. No keep in mind when you pull money ouf of a 401K when you retire its taxed as income...... yet you were already taxed like a sob on the trades. Talk about double taxation.
To show you how out of wack this is, my broker would charge me .005/share, not by the dollar amount but per share so 50,000 shares costs 250 bux each way, 500 bux total. Now addd 25 grand to that!? gimmie a break
You can read more about this tax here: http://www.rallycongress.com/no2tradertax/1536/tell-congres-to-block-trader-tax/