http://www.guardian.co.uk/business/2010/fe...essing-problems

Awesome idea. But why is it so low? Surely speculative trading can tolerate a 0.1 or even 0.2% tax on every transaction?

Go for it, it will never directly effect me.

I'd rather see a Pigovian tax on certain types of speculative trading, personally, but I do like this idea.



Because you'll never trade, or because you're not British?

'cause I'd dispute one of those, and it'd probably not be the British one.

only your mom and dad could do that, and they already have.

Well, at the current rate I'm making money, I have a better chance of becoming British than I do of buying stocks....

BANKER: What? Decrease my profits by 0.2%? Unthinkable!

... unless they want to keep from being torched and pierced with pitchforks, banks will oppose this.

if the goal is to completely kill whatever kind of speculative trading is being taxed, sure. keep in mind that this kind of investing generally isnt being done for the long term. these institutions are speculating that three minutes, hours, days or weeks from now someone will be willing to pay more for the particular 'investment' than they did. and in order to minimize risk at that point, they sell. even a 0.05% tax on this kind of speculation would be devastating. (just look at the revenue estimates; were talking about $400 BILLION in lost banking profits. thats the annual revenue (not profit) of goldman sachs... ten times over.)

to dumb things down, this is the government proposing to do what the guys in office space did. stealing a tiny part of each transaction doesnt seem like a big deal until you consider the number of transactions from which youre stealing.

that's 400 billion if it's enacted globally. and speculative trading wouldn't be killed, but it would certainly be dampened. but what's the harm in that?

yeah, it wasnt entirely clear what was meant by 'internationally' in the article. either way, thats a crazy amount of money.

total profits of the worlds 75 largest banks/financial services companies in fy 2009: $182 billion.

so, yes, youre essentially trying to kill whatever kind of speculative trading youre taxing. and thats not necessarily a bad thing.

but it depends on exactly what kinds of 'speculation' they propose being taxed. trading currencies or commodities is 'speculation,' for example.

i'm trying to figure out how the tax expects to raise over twice the amount of money the target industry generates with a .05% tax.

im going to go out on a HUGE limb and guess that nobody thought to adjust for decreased 'speculative' investment when coming up with the number. well, that or somebody did think of it but the guy in charge preferred to sell the bigger number.

[the new, computer-driven funds trade HUGE amounts of money daily. heck, ONE fund run by the computers at renaissance technologies accounted for 14% of nastaq volume one day in 1997. 6000 trades PER SECOND. these guys do exactly the same thing with 'speculative' investments. but you can bet their processes would change significantly if such a tax were enacted.]

and 'profits' arent exactly equal to money generation. bonuses, which are huge at many of these banks, are simply profits that arent reported as such. and then theres actual overhead.

If this tax ever actulally happened, i'd move all my vast amounts of speculative trading over to hong kong. just sayin'.

The man's a fiscal genius. I expect to see him as a cause of a financial crisis one day.

you can count on me, america.