Where are you getting the 1.5% figure? It does not sound right and is not
at all consistent with the S&P 500 (more like 9%):
http://politicalcalculations.blogspot.com/2006/05/mapping-sp-500-performance-since-1871.html
Regardless,
your figure is perhaps unrealistic (at least in the last couple of decades)
to use in any current analysis given that your average bank account would
pay the same with zero risk.
Just to be clear; I'm very much against
the tax and believe that it is more likely to fail than to be passed. But,
at the same time, it would not surprise me in the least to see it go
through, even globally. We're living in turbulent
times.
Mike
--- In amibroker@xxxxxxxxxps.com,
"Edward Pottasch" <empottasch@...> wrote:
>
> let me
add to that:
>
> did you know that over the past 100 years the
stock market only returns about 1.5% per year? Let's assume this is the
return you can expect in your pension fund. How many trades can the manager
make before you are losing money when they tax you 0.25% per trade?
>
>
> ----- Original Message -----
> From: Edward
Pottasch
> To: amibroker@xxxxxxxxxps.com
> Sent: Tuesday, December 08, 2009 9:00 PM
> Subject: Re:
[amibroker] Re: Traders Tax
>
>
>
>
> if
they think they will make easy money on this they are fools. Trading volumes
increased because costs are low and access is easy. Taxing it 0.25% will
kill it off completely. If they do it to win votes then wait for Joe Six
Pack finding out that he is paying for this tax in his pension fund as well.
These pension fund managers will know how to charge Joe Six Pack for all
additional costs they encounter. Don't they understand trading is a zero sum
game? If they are worried we push up prices then I can say I shorted oil
today (for a trade). Let them look at management of listed companies paying
themselves 400 to 600 times that of the average worker. Then they can win
some votes too.
>
>
>
>
> ----- Original
Message -----
> From: Mike
> To: amibroker@xxxxxxxxxps.com
> Sent: Tuesday, December 08, 2009 8:34 PM
> Subject:
[amibroker] Re: Traders Tax
>
>
>
> I suspect
that investors would hardly notice the tax. Depending on the frequency at
which they move in and out of stocks, it would likely end up being
comparable to a mutual fund management fee.
>
> The ones most
at risk, including myself, are high frequency traders. The tax would seem to
be aimed at hedge funds that constantly take micro profits, quickly moving
in and out of positions.
>
> Unfortunately, it severely
impacts day traders and swing traders too. It is not uncommon for high
frequency traders to have several hundred trades in a year. With smaller
accounts that can be hundreds of thousands in volume, and several million
dollars in volume for larger accounts. At those rates, that amounts to tens
of thousands of dollars in additional taxes.
>
> If politicians
only consider the impact as it relates to investors (the vast majority),
then the tax appears well targeted at Wall Street. It is only retail traders
(minority) that are at risk of being put out of business.
>
>
The bigger impact is, I believe, what impact it would have on capital
leaving the US for opportunities elsewhere.
>
> If US markets
are worth the premium for their stability, liquidity and diversity, then
capital will remain and the politicians will pass the tax. If capital is
expected to flee, the tax will not be passed.
>
> If even just
a few of the larger worldwide exchanges agreed on a tax (in order to leave
nowhere for capital to flee), then the countries involved could reap huge
revenues. After the amount of money that has been poured into trying to save
the respective economies, that revenue stream has got to look pretty
appealing right now!
>
> Mike
>
> --- In amibroker@xxxxxxxxxps.com,
Nick de Peyster <nickdepeyster@> wrote:
> >
> >
The odds of this passing strike me as extremely low. So far the government
has been extremely supportive of the financial sector ... is there any
evidence of a change in the winds?
> >
> > I would think
this trader tax might hurt momentum investors rather than traders
(especially counter-trend traders).
> >
> > Reason being
that the momentum investors tend to count on the counter-trend traders to
provide liquidity. Of the two, the countertrend traders have the shorter
holding period and smaller gains so the tax will hit them most
heavily.
> >
> > So what will happen is that the
countetrend traders will become more selective to offset the tax. Pre tax
the countetrend trades will become more profitable although after tax it
won't make a difference.
> >
> > The momentum investors
will take a bath, because there will be fewer countertrend traders on the
other side.
> >
> >
>
>
>