"HR 1068 The Robin Hood with a wedgie bill
I admit freely to being the only flaming liberal in the area aside from our economist who is fairly off the charts. I believe that taxes are what we pay to have a civilization that functions. That we pay taxes now and we are becoming more dysfunctional is a worry. Taxes like HR 1068 advocates however, crosses a line, not so much because I work indirectly with traders who move stock all day long but because the "whereas and wherefores" of the bill as it stands The stupid thing makes no sense.
I suppose that congress just thinks the money is insignificant in part because so many people just buy and hold stocks that this transaction tax will seem like a minor bee sting. So I watched a trader buy 100 shares of a big name stock today on the premise of a big move in the stock after a public announcement. Now he is risking maybe $20,000 and if he did his homework he might take $300 or $400 out of it. If he guesses wrong he will take a loss. With the tax of 0.1% he will take a $200 loss when he buys and another $200 when he sells it. If he worked hard, followed his trade, had great timing, he might break even for the day..or he is going to loose with the tax and the loss maybe 1% of his cash.What possible incentive would I have to do this? I'm trying to figure if the price is prorated if it would make any difference. What I mean is would traders want to trade only penny stocks?"
OK back to reality. There is one trading firm, a hedge fund, in NYC and Chicago that routinely accounts for 10% of the volume of stocks traded daily. In the summer, if you follow the market you can time the Long Island Railroad express train departures to the Hamptons based on the volume simply dying off at a certain time because these guys are getting out of town for the weekend. Just letting you know that Washington hasn't really gotten around to this group yet.
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