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ecadaret

Newly Proposed Wall Street Tax

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Hi all,

 

I saw this article yesterday. The tax is fairly minimal, but what i think is silly is that it taxes all traders and it blames "high frequency trading" for the volatility of the market. We all know that the markets are volatile because of institutional traders making their moves and that is what drives the prices in significant ways. Everyone else joins in for the ride and try's to capitalize. I am not sure if similar bills like this have been proposed in the past (i am sure it has). Curious what ya'll think.

 

https://finance.yahoo.com/news/lawmakers-introduce-bill-to-tax-wall-street-211353714.html

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People seem to blame the stock market for all their troubles. The (high-frequency trading) is my favorite because nobody is saying anything when the trade is going in their favor.

This type of tax has been proposed several times and it always ends up nowhere. 

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I live in Switzerland, and we actually have this tax.  .15% per trade.

https://www.moneyland.ch/en/swiss-stamp-duties-definition

I am charged this by my broker on every trade, so I pay when I buy and when I sell.  So if I take a $10K trade with hope of 1% return of $100, I am charged $15 when I buy and $15.15 when I sell.  On top of that I pay $15 per trade in commission.  ( I have to get it down but the lower rate of $6/trade only kicks in if I make 100+ trades per month.) Now I am at $60.15 and then add on the exchange fee at the end. If, God forbid, I should partial, there goes my profit.

It's a lot!  I have reason to believe that my earnings are considered cap gain, not income because I am not a "professional" trader.  Cap gains are not taxed here. If I do have to pay income tax, that will be another 30%.

It is pretty frustrating, but part of my induction into trading is to meet with a tax accountant to figure out how to get my fees down.  I have read that if I switch to IB I will not have to pay the stamp duty since it is based in the UK and the requirement to levy the tax is only applicable to Swiss brokers, not Swiss residents.

I appreciate all of the mentors who remind me that I should focus on what I can control, i.e. how I trade, and less on what I cannot control!

Jennifer

 

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Jennifer, If you are an American citizen, just open an IB account with your US info/address etc. You can trade anywhere with that account and pay US taxes, or not if you lose money. Unless you renounced your citizenship or something like that then you can do this. I've traded all over the world with futures accounts and with IB USA.

Otherwise long term investing or swing trading is your only option with those fees and taxes.

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On 3/6/2019 at 5:56 PM, ecadaret said:

Hi all,

 

I saw this article yesterday. The tax is fairly minimal, but what i think is silly is that it taxes all traders and it blames "high frequency trading" for the volatility of the market. We all know that the markets are volatile because of institutional traders making their moves and that is what drives the prices in significant ways. Everyone else joins in for the ride and try's to capitalize. I am not sure if similar bills like this have been proposed in the past (i am sure it has). Curious what ya'll think.

 

https://finance.yahoo.com/news/lawmakers-introduce-bill-to-tax-wall-street-211353714.html

If this happens i will give up my US Citizenship. This will not pass. it will take a huge toll on mainstreet also, think of all the 401k money that is deployed every week to stocks and etfs that would have to pay .2%. this is higher than a sector fund management fee. This will not pass and she will not even win elections.

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