Jim DePorre on the Trading Tax

From here:

One of the things many people overlook in the discussion of a tax on trading is how different the market is today than it was before the Internet and all its associated technologies were developed. Trading has been greatly democratized over the years — now just about anyone can be a trader and earn a living in the market if they have a little capital and are willing to work hard.

Fifteen years ago you had to be live and work in one of the major financial centers if you wanted to be a “real” trader. There was no way someone like me sitting on the beach in Florida or the hills of North Carolina could participate in the market. Now we can all become self-sufficient if we have the desire and inclination to do so.

The Internet made trading an even playing field, and as a result a major industry developed around it to assist the man on the street who wanted to participate in the markets. I know many individuals who now consider trading to be their primary job. They run small businesses that support them and their families, employ people and pay substantial taxes on their profits. Instead of using stock brokers, people now do research on their own using the many sites and tools available on the Internet, which has created productive businesses like TheStreet.com and RealMoney.

When I hear the discussions about a tax on trading, it is clear that the politicians are after the big investment banks like Goldman Sachs or the irresponsible banks that helped to create the subprime crisis. I never hear any talk about how different the world of trading is now and how so many ordinary people look to the market as a way to produce income.

A tax on trading will not only hurt the way the market operates, it will hurt many innocent individuals who never had any responsibility for the excesses of Wall Street in the first play and probably helped the market recover much faster than it would have otherwise.

I hope that those who back a tax on trading figure out that they aren’t just going to extract some fees form powerful institutions. They are going to hurt the lives of thousands of people on Main Street.