No, we can’t return to those ridiculously high post-war tax rates (which few people paid, anyway).
22 thoughts on “Mad-Men Economics”
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No, we can’t return to those ridiculously high post-war tax rates (which few people paid, anyway).
Comments are closed.
When the Republicans are pushed into freaking compromises over this sort of crap, they should eventually cave to the position “Well, we’ll let you do it in California and New York, but none of the Red States.”
That is: Prove the idiocy works in -any- petri dish and -then- we’ll talk.
The free lunchers have for the most part gotten wise to this. They call it “the race to the bottom”. The solution is to in addition isolate California and New York so all the bad people outside can’t screw up the budding utopia inside. I’m sure there’s some ideas out there for how this could be done.
the issue is wether wall street should pay sales tax on their products
just like any other provider in the US does. the NASDAQ does trillions of
dollars in business every day, shouldn’t they pay tax just like the fish market?
Fish is sales tax free here in Washington.
A sales tax on shares would be … very interesting. Currently, I can buy a share of AAPL (Apple) for 502.96 because I think it’s worth more than that. It makes it to $525 and I sell, because I -don’t- think it’s worth that. I make $22.
With a 10% sales tax and the price at $503, I just don’t buy in the first place, because I can only buy if I think the price is in excess of $550!.
“trillions of dollars” to “what just happened and who can we blame over it?” in nothing flat. Good work.
The transactional cost on buying a house is close to 10% in most places and people still buy and sell them, just not on a daily basis.
When i go to the ATM and draw out my own money, i pay a $2 transactional fee.
People seem to pay that, and i see people go to the ATM, draw $20, pay the fee
and move on.
the Tobin tax is proposed at 1 Basis point.
When i go to the ATM and draw out my own money, i pay a $2 transactional fee.
Get a new bank. When _I_ go to your bank’s ATM, my bank will reimburse me the $2.
Managing to convert a market that’s “trillions of dollars daily” into “2-3 times per 80 years per stock” is beyond pathetic. But typical. “Gosh, who knew?!?”
dcguy said:
I think I’ve paid a transaction fee twice, both times in an emergency when I used an ATM that wasn’t my bank’s.
Next thing you know, you’ll have to pay a transaction tax when you give your wife her mad money, or give your kids their allowance.
the Tobin tax is proposed at 1 Basis point.
I see the Tobin tax as the economic equivalent of suppressing dissenting speech. It’s to hinder short term trading and market fluctuation which might inconvenience or embarrass the powers that be after they make yet another bad economic decision.
It’s worth noting here that 1 basis point isn’t much, but what it does is make certain kinds of frequent trading very expensive. So I think it’s deceptive to claim that you are just making a “provider” pay sales tax for their services, when some “providers” would have minor increase in cost and other “providers” providing similar services but at a much higher frequency have large increases.
It’s more like a sin tax where socially unpopular behavior gets massively taxed.
That’s how DC guys think (or don’t). All they see are opportunities to seize more revenue to line the pockets of themselves and their cronies and to buy votes. Beyond that, little else matters.
Fish is sales tax free here in Texas too. In fact, most food products available at the grocery store are free. It’s not until someone prepares the food into a meal that it becomes taxed, sort of like when a business finally offers a product.
It would be astronomically stupid to tax shares of a business, unless your goal is to protect the rich and destroy the middle class.
unless your goal is to protect the rich and destroy the middle class.
Hmm. While -sounding- anti-rich and pro-poor. It’s genius. I wonder if they can find enough suckers to go along with it.
Wall Street wont be paying a transaction tax. Everyone with a 401k or who saves for retirement will be taxed. You hold up stock brokers as deserving of additional taxes but the tax you are proposing targets investors not traders.
Not only that but the transaction tax pulls out money before any profits have been made making it less likely any profits are made at all. What we have now is a system that allows people to take a risk and if they profit they pay a capital gains tax.
When rates of return are so low and take decades to achieve, a transaction tax will discourage and limit economic activity. Just what we need to work our way out of this depression.
the issue is wether wall street should pay sales tax on their products
just like any other provider in the US does.
dcguy, Wall Street is a street in New York City, not a “provider”. And as a generalization of what Leland noted, generally you don’t pay sales tax unless you’re selling to the public. There are plenty of examples of tax free transactions throughout the US. No other such trade market gets taxed in that way.
Second, it’s just a really stupid idea. Stocks can change hands frequently and you imply they’ll get taxed each time. It’s basically just a huge disincentive to trade in stocks (without any sort of justification for that behavior modification). A similar tax on fish isn’t a huge disincentive to buy fish since the tax only happens once.
And such a tax on stocks is trivial to bypass by moving the trading of stocks outside the US. So your proposal would move a massive amount of economic activity outside of the US.
I wish you’d educate yourself and maybe think a little before posting garbage like this.
He could take a couple thousand dollars in mad money and purchase some stocks through Fidelity or Scottrade. In order to make a profit he will have to take trade fees into account, similar to the tax he wants. Existing taxes and fees can kill a small gain pretty quick.
Al gave a good example up above but it needs to be fleshed out a bit.
Sales Tax is generally assessed on finished goods, and only once on a given item. Stocks aren’t exactly a “finished good”, and the same stock share may be sold and resold many times. A financial transaction tax, especially at typical sales tax rates, would be like throwing sand into the gears of the economic engine.
Not watching television anymore, I’m out of the loop on this Mad Men economics and this transaction tax.
Is this the type “transaction tax” that Charles Collins used to advocate on talk radio of a 1% tax on all transactions? His reasoning was that one company called (I think) the Depository Trust Clearing Corporation handled two quadrillion dollars a year in transactions all by itself and would therefore create twenty trillion a year in tax revenue. I called in to argue a couple of times and never made any dent in his certainty that his platform could eliminate all other taxes and have the national debt paid off in a year.
At a glance, it sounds like a large tax on income at 50-70% with the usual loopholes.
One obvious effect of such a large tax is to encourage corporate conglomerates (which actually was a post-war thing in the US). I will still be able to invest in the company to avoid paying that 50-70% of taxes. But if I want to start something new endeavor, I either keep it in the company or I pay those taxes. A classic way to do that is to put all of your business efforts under a shell company.
When you couple that with low interest rates, you get corporate conglomerates and a huge incentive to centralize business – but only under people who can borrow large sums of money. Basically, if I can borrow money at a lower rate than the ROI of a target company, then I can generate profit just from buying that company with borrowed money. I can then throw the new company under my shell company umbrella and move on to the next target of acquisition. Sure, this trick works now and there are businesses which specialize in doing that, but the incentives would be much stronger under a high income tax scheme.
So my take is that if we implement high tax rates on income, we’ll return to some of the problems of the past.
He is talking about something called the Tobin Tax.
Well, dcguy was. The article just seemed to talk about the potential dangers of high income taxes which cause different problems.
Actually, dcguy only thinks he is talking about the Tobin Tax, but like many things, dcguy is wrong about that too.
Tobin tax is on transaction of currencies, which is the type of thing Soros does. Currency exchange is just a part of what Wall Street does and very little of what most companies offer as investments, and almost nothing to do with the NASDAQ. There is a tax on stock trades, which is used to fund the SEC. It’s less than one basis point, and is in fact a fraction of investor fees. Yet it generates plenty of money to fund the SEC.
There’s no such thing as a fair tax.
Taxes are what you pay for an impoverished civilization.