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Tax on Trading: Labor Unions and Demos Want to Tax Trading

September 9th, 2009
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09.09.2009

Tax on Trading: Labor Unions and Demos Want to Tax Trading

original article written by Net Advisor

WASHINGTON DC. The tax happy demos are at it again. Seeking more money to fund their social programs, they have gained support from labor unions to place a tax on every single stock trade.

Thea Lee, AFL-CIO stated on CNBC-TV today that a trading tax would “create stability” to the financial markets. Lee is an economist by profession, and clearly has no clue how the stock market works. If you want stability, you should not be in stocks. You should be in CD’s as long as the bank doesn’t go under.

Lee claims the tax would reduce “speculation” but this won’t work. Market speculation and risk taking is what has driven the USA to be a 1st World Nation over the last 200+ years. Punishing people to take risk with their own money is just plain stupid.

This is just another example of “government knows best,” and it wants to tell you how you should and should not live your life. Anyone getting this yet? I have numerous examples of this just see blog history.

I don’t believe in a government that protects us from ourselves.

—- President Ronald Wilson Regan (1911-2004)

Here is who really would be impacted by this tax?
Every mutual fund, ETF, private funds such as hedge funds, pension funds, etc would all have increased costs to trading and reduce profits or increase losses in retirement accounts.

1st. The result of an additional tax would likely increase fees by these funds to offset the tax.

2nd. The result could lower their profits to investors in those funds by the amount of an extra tax the companies would have to pay the government. The government already has high capital gains taxes for those who PROFIT in stocks. Now the government wants to tax you even if you lose money.

Wall Street firms could move part or all their trading operations outside the USA, which all the big firms have overseas trading operations already. They can trade US stocks on foreign exchanges and avoid this tax. Thus, the people who would be most impacted are the mom and pop, and small time traders.

The Far Left Gets it Wrong, Again.

Democrats and labor officials would also like to take a bite out of Goldman’s profits. Liberals are angry the company, which immersed itself in the frenzy of speculation leading to last year’s financial collapse, is now making huge profits after accepting (and repaying) $10 billion in government aid. Goldman employees are on track to earn an average of more than $700,000 this year.”

— (Source: The Hill.com)

Now The Truth Comes Out.
The Socialists Liberals can’t stand people making money, and anyone who does, should be punished and that wealth redistributed by the government. They are upset how in bad economic times, someone like a Goldman Sachs can actually make money? And since no one else is making money, Demo’s seek to go after and tax those who are making money just like they did in the Great Depression.

Under the Revenue Act of 1932 the US government raised top tax rates from 25% to 63%. Obviously, the Depression was over the next year right? No. We stayed in Depression for another 7-9 years, and it was only World War II (1941) that got the USA out of the Great Depression.

The facts are:

1. Goldman Sachs (GS) avoided investing big going long in the sub-prime market in 2007-2008 which is why they are still in business today. In fact they bet that the market would fall, and they were correct. I also said over 2 years ago that this was a problem, and “fortunately” I didn’t have billions to invest or I would probably be singled out and taxed too.

2. Like other banks, GS was forced to take TARP money by the government.

3. GS repaid the TARP ASAP but only after the government allowed them to repay. The government did not want companies to repay the TARP because the government wanted control over their business. GS not only repaid 100% of tax payer money back, they paid back with a one-time dividend of $425 million on its preferred stock.

4. If some GS employees are on track to make $700k this year it is not because they are printing it. They are making money and earning it. What a concept! And they will pay heafty income taxes to the government.

Let’s see, I earn more money, so the government makes more money. But if I earn less the government gets less. Hmmmm. So If I was government, what kind of incentive system would I want to operate? Of course, tax me if I make money or not.

Traders provide greater liquidity to the market, and tighter spreads. It used to be that spreads – the difference in price between the buy (ask) and the sell (bid), was 12 1/2 cents minimum or 1/8 of a point. Higher prices stocks had spreads of 50 cents and some .com stocks used to have spreads of multiple dollars. All of this changed, and now spreads are often just 1 penny in most major stocks.

Members of government are still trying to find ways to take your money whether you earn it or not. They seek to control your behavior. They are still blaming Bush for all the money THEY are spending. They just can’t take responsibility for their own actions. They seem to think that all the money they are printing and seeking to impose new taxes on people in a recession are somehow going to bring utopia to this country. Is this the “Change” many people voted for?

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