Dec
27
Why don’t we place a transaction tax on sales and trades of stocks and bonds?
Filed Under Best Trading Strategies
Steve C asked:
The American stock exchange is the most stable and secure in the world (for the time being). Every weekday, hundreds of billions are exchanged without any sort of tax on the transactions. We pay sales and use tax when we buy other capital assets (then subject to capital gains or losses upon sale) but Wall Street is treated as a sacred cow. A transaction tax would serve to further stablize the markets since no one would be inclined to invest in short-term strategies. I believe a transaction tax needs to be studied and considered as a way of allowing our income tax code to be made much simpler than it is today. The so-called Flat Tax and Fair Tax (National sales tax) would only shift most of the tax burden to the poor. I mean do you really want to pay 10 or 20 percent of profit to the government when you sell your home?
The American stock exchange is the most stable and secure in the world (for the time being). Every weekday, hundreds of billions are exchanged without any sort of tax on the transactions. We pay sales and use tax when we buy other capital assets (then subject to capital gains or losses upon sale) but Wall Street is treated as a sacred cow. A transaction tax would serve to further stablize the markets since no one would be inclined to invest in short-term strategies. I believe a transaction tax needs to be studied and considered as a way of allowing our income tax code to be made much simpler than it is today. The so-called Flat Tax and Fair Tax (National sales tax) would only shift most of the tax burden to the poor. I mean do you really want to pay 10 or 20 percent of profit to the government when you sell your home?
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6 Responses to “Why don’t we place a transaction tax on sales and trades of stocks and bonds?”
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We already pay taxes when our stocks go up in value (capital gains) so I see no reason for another tax.
Yes! And make sure we do it when Bush is in office so we can blame him for the downturn our economy suddenly takes after the tax is introduced!
well technically it would be considered double taxation because all capital gains are taxed within the year of the trade meaning there is a transaction tax, just not as immediate
Could it be that we don’t raise taxes so that we can encourage the poor and lower middle class to put away money in the investment markets that provides more capital to employers???
All you are doing with such a tax is making it harder for everybody to invest.
Many sales of stocks and bonds result in either a capital gain or capital loss. Net short-term capital gains - the proffits of active trading - are taxed like ordinary income. Most sales of stocks and bonds include a commition to a broker - such commissions are income, and the proffits from them are also subject to taxation.
the FAIR TAX PLAN does not shift the tax burden on the poor.
it is a consumption tax, so the rich, who usually consume more, would be taxed more. also, there is a stipulation that everyone would get a prebate check covering taxes up to the poverty level — so if a poor person buys their necessities only, they pay NO TAXES AT ALL. this program would stimulate our economy!
please go to fairtax.org
(do not make statements about things that you do not properly understand please)