I think the reason we don't get the tax on stock market transactions is because of the influence of Wall Street on Congress, and President.

Ralph Nader proposes a small tax on each transaction, enough to generate money to give back to investment firms in bailout money. That way they pay for their own bailouts, rather than taxpayers paying...

V. McHenry-Hepner: "How much revenue would a 1 percent federal tax on the buying and selling of stocks produce?"

The revenue generated would be negative. Please read the New York City Independent Budget Office study. The study considers only the local NYSE and AMEX exchanges being taxed at a much lower rate. If trading volume dropped by only one third, the net revenue would be zero or negative, with 150,000 jobs lost. Consider if the tax was national and on every exchange and consider that some are predicting a volume decrease as much as 90%. Around 2/3 of trading is high frequency, so trading volume would drop by at least that much. I would think a minimum of 400,000 jobs would be lost - most of them not directly related to finance - as the US financial capital of the world will definitely move overseas like how we have been losing other major industries.
http://www.ibo.nyc.ny.us/iboreports/stocktransfertax.pdf

Everyone should consider their retirement accounts. Do you want a lifetime average yield of 10% per year without the tax or 8% per year with the cost of the tax? The average investor or mutual fund manager buys and sells only once per year, that 2% yield difference will cost a 21 year old with 50 years until retirement a little more than one half of his or her account never to be realized with that "tiny" tax.

We have already tried this tax. In 1966 the Johnson Administration abolished the stock transaction tax that the US had since 1914 to give the poor cheaper entry into a richly, exclusive market. We got rid of it once, must we go through this again?

One should ask all of those countries that abolished their transaction tax. Look at what the tax recently did to Sweden.
http://siteresources.worldbank.org/DEC/Resources/23661_chap_11_taxation.pdf

Canada has considered the tax. Conclusion: "Sweden, on the other hand, appears to be a classic example of an experiment gone wrong, while Germany, like many other countries, has decided that the costs outweigh any benefits from this type of tax."
http://www.parl.gc.ca/information/library/PRBpubs/bp418-e.htm#POTENTIAL

WHy don't we tax stock transactions? Because we all ready do! Capital gains, income, etc. Why is a tax the answer? How about if instead the people who are padi to do jobs such as regualtion and enforcement of current rules simply do their job, ie SEC? For example they were informed on numerous occassions about Madoff and did nothing, and I should pay more taxes so they can hire more ignorant lazy people? Come on! How about the debt swap? They knew what was going on, but again chose to do nothing. Those could have easily been made to trade on a regulated exchange like the Chicago Mercantile and been kept in check, but again, they were to lazy to make the effort to take action! And again, how does more of our money make this better? Actually holding our government employees responsible would be a good idea and withhold pay or fire them when they are incompetent like in the private sector. This would free up tax money to be used to hire competent personnel. Please save the tax this or that everytime there is a blow up for the screwed up countries of the world and save the US!

Why not? Because it is one of these ideas which sound OK but are in fact terrible. First of all, it would punish any trader or hedger, basically driving many of them out of the market. To trade 1 single contract of the SP Mini, you would now pay $200 instead of $ 6 or so. Before you say that "trading is bad" consider for one moment who the biggest traders are? In the grain markets, they are the farmers, the grain silo operators etc. that need to hedge to protect themselves against price declines etc. I personally know a group of farmers who said that they would stop planting soybeans etc. if this tax were enacted. Same with the airlines and fuel costs.
The "speculators" remaining add much-needed liquidity to these markets. Otherwise- if you eliminated all the speculators- who would take the other side of the trades of the hedgers? You would have a completely illiquid market, which would be much more volatile and cause big price swings. And lastly- you would probably drive the whole mutual fund industry out of business. These firms do hundreds of trades per year, with huge amounts of shares. They barely manage to beat the market now to eke out their few percent... how do you think they will fare with this tax??

I am an independent, self-employed securities trader. I am not wealthly, but for 10 years I have supported my family adequately from my business. I pay income and self-employment taxes, like thousands of other independent traders. A transaction tax would put us out of business overnight, and would virtually destroy many brokerages and support businesses that employ thousands of honest, hard-working wage earners.

Idiots always dream up things they know nothing about. "Gee, a great idea."

Why is this the fourth time that Rep DeFazio has attempted to get this bill passed into law, first in 2001 and now recently in step with TARP regulations? What economic crisis existed in 2001 (his reasons for submitting this bill now)? DeFazio has been pushing this agenda for nearly a decade and changing the reasons as he goes along. It really would be great if those in the media, especially those who call themselves investigative reporters, would actually investigate a subject before heading out into the streets with their own pitchforks and rotten vegetables to throw.

The stockmarket is now global. A tax on stock trading will push the trades out to another country without the tax, like London.

On the other hand, a tax on derivative instruments like CDS and CDO on the other hand would be a great idea.

I'm sure it is emotionally traumatic to look up and realize that the career you have dedicated yourself to has just destroyed the entire economy, but at least don't ask the rest of us to feel obligated to protect your job going into the future.
The stock market only works as an investment system. When it is turned into a high-stakes casino, then we all lose. If a small transaction tax encourages people to think in terms of years instead of days, that's good. If the crazy speculators who raped our system decide to move to a different country, we should wish them a fond farewell. If farmers are playing a game of futures roulette, then maybe they are in the wrong business. The economy chugged along quite well when finance was a small and boring part of the system. I would be happy to return to those days.

>>We have federal taxes on gasoline, >>so why not the selling of stocks?

Traders pay taxes on capital gains. Why would someone want to tax money that is already after-taxed before it made any profits yet?

>>may go far toward bringing >>i[nvestment] bank salaries more >>in line with what teachers earn

Because capitalism implies that people who take more risk must have higher rewards to compensate for the risk. I guess some people just want to turn this country into socialistic wasteland.

Around 65% of the volume in the market comes from "high frequency" trading. This is the liquidity that makes it possible for you to buy or sell within seconds any stock or bond you own. If this tax was levied virtually all of this liquidity would disapear overnight along with the current tax revenue generated from these trades. Most people involved in this business are self employed or work small outfits and had nothing to do with the current crisis. Find a witch to hunt somewhere else.

Dean Baker often comments on the fact that the UK has a transaction tax. But he always leaves out the fact that only small investors in England pay the tax. All medium and large players (insert UK's Wall Street) are exempt. That is not a good example of success. This tax is on its way out in virtually every market that has imposed it. Why, because volume dries up, and with it goes income and capital gains taxes as well as the liquidity needed to have a fair orderly marketplace.

Peter said: capitalism implies that people who take more risk must have higher rewards to compensate for the risk.

I would guess, then, that you would agree to pay coal miners and police millions, and bankers thousands, since bankers risk other's money while miners and police risk their own lives.
The rich risk their excess, while the poor put their lives on the line every day. There is an inherent arrogance behind the belief that people who play with large sums of money are somehow worth more than those who only have their lives to play with. Have you never heard the Biblical story about the poor woman who gave a little, but it was more pleasing to God than the wealthy who gave much out of their plenty? Where would the rich be if they didn't have the poor to run their factories and build their roads? The world can survive much better without the rich than the poor. When the rich finally realize this, they may change their attitude. Or, better yet - have you seen the movie "Bug's Life?" When the POOR realize that they are more valuable than the rich and powerful, things will REALLY change.

Justice St Rain, if you made your personal choice to be poor so be it. But don't expect others to look up to you as role model. The investors risk their own money for a living and they eat what they kill. It's not up to coal miners and teachers to tell the investors how they should earn their bread and butter. In this country everybody is free to make their choices in life.

it is so scary how such ignorant people penetrated into Congress without even basic expertise of the domain they propose about, and, importantly, the huge devastating consequences of their "decisions".

even Al Qaeda could not be greatful to them enough for their "job" of:
* killing all liquidity in the US market
* moving financial capital of the world into any other country with more favorable taxation

Justice St Rain, You are sadly mistaken on your premise that daytraders brought down our economy. It is an opinion derived from nightly news sound bites and ignorant congreemen and women. Does an insurance salesperson really provide value, or are they and their companies just an added cost to everything we do. If you were to look into the medical industry you would find that a fair amount of cost is derived from that which is supposed to help us pay for medical bills. They insurance company paases on its costs, the medical office, hospital pass on the cost of processing the claim and staffing entire departments with people to deal with the all the differences amomg policies. Etc, etc. Do we really need auto dealers? Why can't we just order direct from the factory? It wouldn't be that difficult in this day of computers and it would surely make vehicles cheaper. I think we should tax these thieves who only benefit themselves and serve no value to us or our economy! Better yet, eliminate them! There are endless more examples, including doctors and the hundreds of specialists with in their field. I feed, house and clothe my family, I contribute to my church, and to various other charities. If I don;t trade I will be making less money and while I don't have a problem with that, I do have a problem of cutting back on my family and the church and charities I support. I have a feeling you don't care, you'd rather we all became wards of the state, the politicians. Now there is a group of people we should tax and make pay for all the phony programs they create and deals to help their friends and contributors, but rarely do anything to make our country better. They should be at the top of the list!