Three House Democrats are ripping a proposed tax on stock transactions, even as the idea gains traction among Democrats desperate to fund jobs creation….
“Proponents of a transaction tax argue that a small 0.25 percent tax on stocks would be paid for by the highly paid financial traders and would not affect most Americans. This is simply not true. A tax on stock transactions would affect every single person who owns and invests in stocks from small business owners to senior citizens,” the letter said.
It would also be paid for by every pension fund that invests in stocks. The economy’s not dead yet, but Congress is working on new drafts of the obituary every day…
“among Democrats desperate to fund jobs creation….”
the idea that government “funds” job creation, sigh! that tells you everything you need to know about these congressmen…..
This kind of tax reminds me of the type of financial fraud called the “salami technique.” It was first seen in the early days of computerized banking systems when some enterprising programmer changed the interest calculation on all savings accounts to always round down to the nearest cent and put the fractional cent difference in his savings account (without creating a transaction audit trail). While it was small enough on each account not to be noticed, when applied consistently across time on every savings account, the programmer amassed quite a sum before being caught.
Politicians love to impose taxes that seem to be small, but generate large sums of revenue in the aggregate. I think they feel like they are putting one over on the poor taxpayer since you are dying a death of a thousand small cuts that you don’t really notice until you are completely exsanguinated.
You know, the top capital gains tax rate is going to jump from 15 to 20% when Congress lets all the Bush era tax cuts expire, the preferential 15% tax rate on qualified dividends is going to expire and they then will be taxed as ordinary income, and the income tax rates themselves will increase, not just the top marginal rate. Isn’t this enough, not even considering the downward pressure it is almost sure to exert on stock prices (further drop in your 401k value, anyone)?
BTW, I heard an analysis on the radio saying that NY better hope that the politicians let the Wall Street types keep their bonuses this year because around 20% of NY income tax revenue comes from these folks!