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Friday, March 05, 2021

Why do Republicans carry Wall Street's water?


The Foundation for Economic Education reported, "House Republicans Working to Block New ‘Wall Street Tax’ Proposals."

The story said, "With renewed progressive scrutiny of the financial sector after the GameStop saga, House Republicans just introduced legislation to protect against the introduction of a damaging financial transaction tax.

"Such a tax has been proposed by legislators such as Rep. Ilhan Omar, who wants to impose a 0.1% tax on all financial transactions. A 0.1% tax sounds small, but it’s not: This tax would be applied to tens of millions of trades happening every day.

"What this tax would mean is that every time an asset worth $1,000 were sold, a $1 tax would be owed, and so on. Omar projects it would raise $1 trillion in revenue and says it would curb Wall Street’s supposedly malicious behavior."

Put the buckets down. Republicans should not be carrying the water for Wall Street because Wall Street backed Biden. Be practical. Let Biden bail them out.

And the transaction tax is nothing. The sales tax on a burger in parts of West Virginia is 7%. That's 70 times the proposed tax on transactions. If I have to pay a sales tax on hiring someone to fix my furnace, then millionaire stock brokers can pay a sales tax on their trades.

As for raising a trillion bucks, that would require a quadrillion dollars in transactions each year. The total value of the U.S. stock market is $50 trillion. You would have to trade every share of stock every 18 days to come up with a quadrillion dollars in trading every year.

Stock brokers would gladly pay such a fee if it generates that much churn.

You would think a foundation that promotes economics education would have someone who can do simple arithmetic instead of relying on the math of some crazy congresswoman who married her brother. 

Wall Street sold out Republicans in the last election. Nevertheless, Republicans line up as Wall Street's Waterboys, eager to please those who helped cost their party the presidency.

Republican Congressman Patrick McHenry of North Carolina said, "Democrats continue to ignore the facts by pushing a financial transaction tax. They claim their state-level FTTs would only be paid by the wealthiest, but Americans saving for their futures across the country would end up footing the bill."

Many readers are probably thinking, Don, he wears a bowtie so he must know what he is talking about when it comes to money.


But looks often are deceiving. He believes that a fee of 0.1% is economic ruin. I have news for him. If a tax of 0.1% can bring your economy down, you have no economy.

And yet he persisted, saying, "These FTTs would penalize Americans saving for retirement, their first home, or their child’s education, all at a time when they can least afford it."

If you cannot afford a $1 fee on a purchase of $1,000 in stock, you should stay on the porch and let the Big Dogs run.

McHenry continued. "As we come out of the COVID-19 crisis, we should be expanding everyday investors’ access to our markets, not holding them back from investing in their future. Republicans will continue to fight for savers and everyday investors, while Democrats push progressive policies to hurt these hardworking Americans."

That last argument is a laugh. You know what really hurts hardworking Americans?

Having Joe Biden as president.

And you know who helped elect him?

Wall Street.

Republicans need to pay Wall Street back by pouring that water down the drain. 

Wall Street wanted Biden. Let Wall Street have him.

18 comments:

  1. they always have. research the 1871 DC act and the motives etc that moved from Europe in 1848 to fuel the rise of the republican party. they have always been mensheviks. europe was healthy at the time in 1848 and kicked out some perpetual troublemakers.

    ReplyDelete
  2. Bribes, aka campaign donations.

    Donahue and his Chamber of Crony Commerce are a big part of the problem.

    Arbitrage.....oversupply of labor.......it’s all connected. Both parties benefit. Uniparty conflict is Kabuki Theater.

    ReplyDelete
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    ReplyDelete
  4. I just don't want any more taxes. Especially if Omar is one of those pushing it.

    It will just be another fee that is passed down to investors - be it those invested in mutual funds, managed accounts or those that make their own trades.

    It may be a small fee, but when this measure fails to curb the behavior our bettors in DC don't like and thought this would curb, they will raise the tax. If they need more money, they will raise the tax.

    Washington does not need any more of our money. They need less of it.

    ReplyDelete
    Replies
    1. Agreed. And taxes have a way of not staying small, they always go up.

      Delete
  5. They are whores who will do anything for money.

    ReplyDelete
  6. Actually, they don't go far enough with the tax. Rather than tax completed trades, they should tax placing an order for a trade. Many orders never get executed, and a lot of the high frequency trading computer systems place a lot of orders well off the current trading price to influence real traders (or other computers) trying to manipulate the direction of the price. Taxing the orders would make them pay a price to influence the market.

    ReplyDelete
  7. I would think you would be against any new tax as it might just be the camel's nose.

    ReplyDelete
  8. OK. First of all, get the idea out of your head that you'll be "sticking it to Wall Street" with this tax, or any other for that matter.

    The wealthy always find some way around them--they have the resources to devote the time and manpower to doing so. The people who will get hammered are the same people who always get hammered--those of lesser means, who cannot devote the time and manpower to finding loopholes.

    Secondly, if you think that this tax will stay at 0.1%, I have a bridge in Brooklyn you might be interested in. Once the tax exists, it can be raised or lowered at will. It will be raised far more often than it is lowered, and on those rare occasions it is lowered, it will still end up higher than it was before. You need only look at the history of the income tax to see how this will end up.

    Thirdly, as a matter of principle, this is repulsive. It amounts to the government taxing the same money four times over--quadruple taxation--first as plain income, secondly when you use that money to buy a stock, thirdly when you sell that stock, and finally the capital gains on whatever profit you might have made.

    No, no, a thousand times no.

    ReplyDelete
    Replies
    1. GREAT rebuttal argument, Love Shack.

      Delete
    2. first point is not an argument at all. You know the way to avoid paying this tax without being wealthy??? Take a guess.

      They raise the tax to 1% or 2% or 5%... you know how to avoid that??? Same way as you did in point one.

      Whoa, now we're worried about quadruple tax? Same agrument can be made to Don's 7% sales tax on hamburger. But that is a tax that is actually hard to avoid.

      Follow Buffets advice, you have 20 chips to use over your life to buy and sell positions. Thus, BUY AND HOLD and as such , no transaction tax! Crazy eh?

      Delete
  9. If they pass this they will just leave NYC for Miami or Dallas.

    NYC is doomed anyway the work from home movement is a social revolution. The best and brightest aren't about to start commuting again, or using elevators, or subways.

    Couldn't happen to a more deserving crowd in NYC the most arrogant city on the planet.

    ReplyDelete
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  11. Let's not forget when CARTER deregulated stock transactions the price of a trade is now 0 in a lot of places from $250 or whatever the floor was in the 70s.

    Adding a couple bucks to a trade isn't gonna break the system. Sorry.

    What the GOP SHOULD DO, but they're too friggin' stupid to, is say "We agree, Omar. But we want this money to be dedicated SOLELY for Social Security funding."

    An easy, easy win for the GOP. But again, too stupid.

    ReplyDelete
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