How does one tax "Wall Street speculation"

[flamingdem]

Is there a mechanism that Bernie had detailed to do this? This is how he plans to pay for things so I'm wondering what he means. Tax big banks? Investment company profits?

[valerief]

1. With computers. nt

[flamingdem]

3. Tax? Tax on the gain on stocks? It's really not clear what he means

because companies can lose money, stocks can lose value too. Is he talking about increasing capital gains tax?

[Snotcicles]

35. There is a way to tax the trades themselves. It would be a small % on all high speed trades

where millions of shares are traded every minute while the market is open. It also slows down those trades that manipulate the share prices and are designed to keep shares from gaining by those who benefit from shorting stocks.

[flamingdem]

38. Wall Street will dump money on Rubio, Trump when things get rolling in the General

now that this idea is on the table. I am wondering whether Hillary would implement this too.

[daleanime]

40. Never ever....

[Cali_Democrat]

2. I believe he wants a transaction tax

So there would be an additional tax on all trades made.

[flamingdem]

4. Thanks. That might work because it would hit the big companies hardest,

hedge funds, traders. Seems too easy.

[global1]

5. I Asked A Similar Question - I Think It Was After The Last Debate....

Check out this link and perhaps it will provide some insight into your question: http://www.democraticunderground.com/1280102085

[flamingdem]

11. Thanks, and he does need to get that across better

not everyone goes to his website (I am guilty!)

[HerbChestnut]

6. Good question. His website provides the answer you're looking for.

Table summing up how he pays for programs:

https://berniesanders.com/issues/how-bernie-pays-for-his-proposals/

Tax on Wall Street speculation:

http://www.peri.umass.edu/fileadmin/pdf/ftt/Pollin--Heintz--Memo_on_FTT_Rates_and_Revenue_Potential_w_references----6-9-12.pdf

Note the last link comes directly from his website. Looks like they linked to a UMass study.

[flamingdem]

20. Thanks, it's time to do the work of learning the details

This debate inspired me to catch up on policy differences.

[Cheese Sandwich]

7. It's a tiny sales tax wall street financial transactions

99% of us would never notice.

Wall Street speculation fee on investment houses, hedge funds, and other speculators of
0.5% on stock trades (50 cents for every $100 worth of stock), a 0.1% fee on bonds, and a 0.005%
fee on derivatives. It has been estimated that this provision could raise hundreds of billions a year
which could be used not only to make tuition free at public colleges and universities in this country,
it could also be used to create millions of jobs and rebuild the middle class of this country

http://www.sanders.senate.gov/download/collegeforallsummary/?inline=file

[flamingdem]

18. I wonder if Hillary came up with anything similar

Americans are so tax adverse but as long as it's geared to a class of super rich people it might work.

[Cheese Sandwich]

28. Apparently Hillary does not support it...

She talks about a few other things like getting rid of the "carried interest loophole", which is probably also good, but this financial transaction tax is something the progressive economics community has been advocating for a long time. She also has apparently offered a high frequency trading tax, which sounds similar but is not the same thing.


"Hillary Clinton Does NOT Support a Financial Transactions Tax"

Published: 12 November 2015
I mention this because some of the reporting on this topic might have misled some people. For example, the NYT recently told readers:

"All three candidates [Clinton, O'Malley, and Sanders] support a financial transaction tax to limit high-frequency trading." [emphasis in original]

While Clinton has proposed a tax on high frequency trading, which is almost certainly unworkable, the other two candidates have actually proposed financial transactions taxes. The taxes they have proposed would raise between $600 billion and $2 trillion over the next decade. Virtually all of this money would come out of the pockets of the financial industry, since its primary impact would be to reduce trading volume. For the vast majority of investors, the savings from reduced trading would be equal or greater than the taxes paid on their trades.

The taxes proposed by Sanders and O'Malley would be a huge hit to Wall Street, bringing it back to the size, relative to the economy, that it was at two or three decades ago. Secretary Clinton has explicitly chosen not to go in this direction.

It is important for the public to recognize this difference. While the other two candidates are proposing measures that would be a major hit to the financial industry, Secretary Clinton is not. Voters should recognize this distinction in their positions; the reporting almost seems designed to hide it. -The Wall Street Journal committed a similar sin, although the error was not quite as egregious.-

http://cepr.net/blogs/beat-the-press/hilary-clinton-does-not-support-a-financial-transactions-tax

[awake]

8. A small .001% tax on every transaction

this would put a damper on high speed trading as well or a 50% capital gains tax on the sale of a stock which was not held for 24hr.

[flamingdem]

12. Interesting, the day traders will be donating to others! nt

[reformist2]

50. It's not even the day traders. It's the big institutions that "trade" thousands of time per day.

"High-frequency trading", or HFT, as it's called, takes day-trading to a whole new level. The worst part about it is that it floods the market with dozens of fake buy and sell orders for each stock, allowing these traders to create an illusion of a market for any stock they want to, when none really exists.

While day-trading may be more accurately described as gambling, high-frequency trading is more akin to fraud.

[Red Oak]

13. A very small tax on high speed trading is a great idea

This tax would help the market be more fair to all investors and would also help society at the same time.

Hope it happens.

[flamingdem]

16. It would help stabilize the market but initially it might cause chaos

The Bernie effect!

[JudyM]

21. Yeah, I love it.

[tularetom]

42. Who pays it? Buyer? Seller?

Does it get added to the cost of the stock or does it come off the top of the proceeds from the sale?

It actually sounds like a good idea, I'm just trying to figure out how it works.

If it applies to institutionally held equities such as those in funds, it will affect small investors as well, to the tune of $1 per every $10k.

[awake]

54. I would suggest a small transaction fee on the buyer & seller

Also go back to the requirement the one can only short a stock on a up tic meaning if the price of a stock was going down the only people who could sell at that time would be people who actually owned the stock. This "short selling rule" was put in to effect in the 1930s and worked for almost 75 years until it was changed under Clinton abound the same time that Glass Segail was repealed.

[cherokeeprogressive]

9. Trade on WS = speculation. Tax all trades.

I suspect you knew that before you posted the question.

[flamingdem]

14. No, I am somewhat lazy when it comes to the nuts and bolts

details. Have to say this idea makes a lot of sense. They can afford it.

[Hoppy]

10. Just restore the tax table to where it was in 1968.

[PufPuf23]

15. Transaction tax.

A transaction tax would raise tax revenue, reduce market volatility, increase investment duration, reduce speculative profit taking, and level market imperfections that favor the banks, hedge funds, and institutional investors.

Part of the revenue raised could be used to beef up enforcement in the financial sector.

The tax would be measured in basis points (small) and still adequate.

[flamingdem]

17. Yes to enforcement, Madoff got away with everything and I doubt it has changed much nt

[californiabernin]

19. It's one aspect of how he plans to pay for things.

It certainly will not pay for all he is proposing. It won't pay for a free college education for everyone. But it can raise tens of billions in revenue yearly if done right (meaning the right percentage per trade). There ought to be exemptions for the little guy funding their IRA or with a relatively small account just trading now an then.

[flamingdem]

22. Plus, it's generally better to buy and hold

I've learned the hard way..

[Fawke Em]

37. He's not offering free college to "everyone."

He always says that it would go to students who "qualify," and, by that, he means students would still have to earn the grades to be admitted, so, with that, yes, the tax would raise enough money.

[snot]

23. Also important to point out another benefit of such a tax:

Right now, the vast majority of trades made are part of computerized, "high-frequency" trading that happens lightening-fast and skims value off the edges of trades by other investors. This kind of trading is not only non-productive, but in some cases the H.F. traders are actually benefitting from a kind of inside knowledge – they know in advance about the trades small traders are placing, and they jump in just before the small trader, to skim a bit of value before flipping it to you at a price that's slightly worse for you than it would otherwise have been.

It's a perfect example of Wall St. looting at the expense of small investors and the real economy. Even though the fractions of value skimmed are small, the frequency and volume of such trades is enormous and adds up to a lot of money.

Another problem with H.F. trading is that it can vastly increase market volatility.

So, many commentators have actually proposed placing a small tax on such trades simply in order to make them less profitable and, hopefully, reduce the volume of such trading.

[flamingdem]

24. But since Bernie and others were unsuccessful stopping deregulation - he mentioned this tonight

how would he go up against the same interests to impose these restrictions?

I guess that's a wonk question and has to do with congress.

[snot]

26. RE- working with Congress, I keep coming back to,

the Repubs have persecuted every Dem. Pres. with all they've got – they impeached Clinton over a blowjob! I just can't believe they're going to cut Hillary more slack than they would any other Dem.

The thing is, even if Bernie can't get everything done he hopes, at least I'll know he's fully on my side, not the banks'.

That said, as Bernie made plain tonite, the 99% are going to have to get active in order to push much of anything through.

[flamingdem]

31. It's hard to imagine that scenario. I remember when Bernie filibustered but the Republicans

won't care about his passion. They'll be out to destabilize everything from the get go. So on that front we'll be in trouble either way. That's why the main enemy is the GOP, we have to look at the polls and trust them but we don't know yet.. I remain open to surprises.

[Admiral Loinpresser]

25. Here you go.

There are various measures that have been proposed to cover these changes. In the College for All Act, which Bernie sponsored, a “Robin Hood” tax on Wall Street would be implemented – a 0.5 percent speculation fee on investment houses, hedge funds, and other stock trades, as well as a 0.1 percent fee on bonds and a 0.005 percent fee charged on derivatives. These very small taxes on the financial sector would completely cover the cost of providing free higher education to all students who are willing and able to attend college or university.

http://feelthebern.org/bernie-sanders-on-education/#college-tuition

[flamingdem]

36. Wall Street could benefit by having a larger labor pool

not that I really believe they care about that..

[basselope]

27. It's called an FTT and we USED TO have one.

We had an FTT from 1914 until 1966

Financial transaction tax and what it does is add a very nominal tax onto each trade. I believe Bernie is proposing .3%, so it would be .05 per $1000. Studies have shown (as these exist in MANY countries) up to a .5% tax has absolutely 0 impact on trading, since the fee is so nominal.

However, when large institutions trade in large volumes it raises money very quickly.

The tax Bernie is proposing would raise approximately 40B which would easily pay for his college tuition plan.

[flamingdem]

34. Thanks, I was just speculating that this tax probably existed at one time

before deregulation. I wonder why they ended it.

[Warren DeMontague]

29. Transactions. Also, we already tax short and long term capital gains at different rates.

It's not really that radical of a notion.

[flamingdem]

33. Now I'm curious about who thought of it first

and if anyone else tried to implement this. Or if in fact it was in place years ago before deregulation.

[SheilaT]

30. A simple tax on all transactions has

been proposed, and makes enormous sense. It can be a fraction of a percent and would still generate huge sums of money. It might also lead to fewer speculative trades, which would also be a good thing.

[flamingdem]

32. I wonder if the Republicans will steal this idea

and just package it differently. It's that efficient.

[Juicy_Bellows]

41. Perhaps in the form of a national sales tax they would.

You know, nice and regressive.

[flamingdem]

43. Exactly, something applied democratically

as in.. letting the rich get out of paying!

[amborin]

39. Jared Bernstein explains:

http://www.nytimes.com/2015/07/22/opinion/the-case-for-a-tax-on-financial-transactions.html?_r=0

[flamingdem]

44. Good info. It's amazing how Bernie's candidacy makes this kind of idea viable

This idea wouldn't have been floated in the last presidential election.

[amborin]

45. Europe is on board:

http://www.theguardian.com/business/2015/dec/08/decision-financial-transactions-tax-june-eu

[flamingdem]

47. Thanks, this is important. But the tax discussed in geared more to climate change

so Bernie should be clear about how both objectives are met.

[karynnj]

46. Many have proposed a tax on certain type of stock

Transactions - ie hedges, shorts, or stocks held very briefly etc

[jillan]

48. A tax on trading stocks.

[mmonk]

49. A small transactions tax would produce a lot of

revenue for one. It would help counter tax havens where the rich and powerful hide their money.

[MrMickeysMom]

51. Sanders got behind this one in 2011 legislation...

He joined Tom Harkin (Senate) and Peter DeFazio (in the House) under that proposed bill to charge a speculation fee of 0.03 percent on credit default swaps, derivatives, stocks, bonds, and other financial transactions. Then, it was calculated to yield about $200 billion in new revenue over the coming decade.

[Depaysement]

52. On some trades

A transaction tax.

It depends on the trade. Some have a legitimate purpose and many, probably most now are the equivalent of the worst rigged casino gambling.

I'd start with high frequency trading worldwide, but that's just me.

[DetlefK]

53. Simple: Tax the trade.

If you buy stocks as an investment, these stocks rarely change hands.

If you buy stocks to speculate on short-term gain, stocks rapidly change hands.



In high-speed-trading, stocks change hands within seconds and fractions of seconds.
Permanently.
24/7.
Sure, you only make tiny profits from the individual transaction, but you do hundreds of thousands of transactions each day.