Mark McHugh

Trading Tax? You Bet!!!!

In Open Thread on Monday, October 12, 2009 at 2:36 pm

I just know these idiots are going to manage to fuck this up too….

A trading tax is by far the best idea proposed for the financial markets in the last twenty years. If implemented properly, it will reduce our deficits, restore confidence in our capital markets, all but eliminate stock price manipulation, neutralize the blunders of our hopelessly inept regulators, and create a few jobs.

So it’s safe to say, it doesn’t stand a chance.

Here’s exactly how it should work…..

  1. Every single friggin’ trade gets taxed that takes place in US markets gets taxed 2%. Buy and Sell. No exemptions!!!!
  2. After six months, the transaction is reviewed. If the position has been held, the account gets “credited” back, with some limitations. Simple accounting (FIFO), again, no bullshit.
  3. After one year, the money credited six months prior is paid, unless there is an ongoing investigation in the security traded or the conduct of the market participant.

HFT? toast (unless Goldman wants to fill the government coffers)….Uptick Rule? don’t need it anymore. Uncle Sam gets a 4% cut off the top from the “organized crime” that has become Wall St. Zero negative impact on real investors.

Make no mistake, such action will undoubtedly produce a temper tantrum response from the spoiled brats who’ve been siphoning our nation’s wealth for the last fifteen years or so. You say market crash, I say price discovery. After the initial turmoil however, we will have a market that treats investors better than traders, instead of stinking, casino cesspool we have today.


Oh and just to be crystal clear, when I said tax everything, I meant everything, even Money Market funds. The phrases “in cash” and “in the money market” shouldn’t be interchangable. If you want to be in the money market, good for you, but stay there for six months or give Uncle Sam 4%. Not really a difficult concept.

Options and futures? Um yeah, you too. I think it’s time to stop appeasing bald dudes with pony tails. Go try your superior probability skills in Vegas or A.C. And of course, the CBOE is welcome to re-price options accordingly, or you could go get jobs waiting tables; I’d be cool with that too.

Just for fun, I’ll tell you what the pre-packaged argument against a trading tax will be. “It will drain liquidity!!!!” Yeah it will dipshits, and so what? Liquidity doesn’t fix everything. Just out of curiosity, how much WD-40 do you numbskulls think should be squirted into a seized engine, before you try something else?

Wow I feel terrible pointing out that even the Almighty WD-40 has limitations….

Perhaps the biggest impact a trading tax will have is on the blogosphere. I mean, why fix a problem when you can gain pseudo-fame bitching about it? Why cure a patient when you can treat him indefinitely? Why “do” when you “try”?

I fully expect we will continue pissing away trillions and a simple, deficit-reducing tax on the world’s real undesirables will go completely ignored.

We’re that lost folks!!!!

  1. I agree with you that we are that lost, but I enjoy the way you get us there.

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