The Wall Street Tax: How It Could Affect You
Over the last couple of days, whats been referred to as the “Wall Street Tax” has been gaining some buzz. Essentially if passed the plan would be to tax a small percentage of EACH trade which would undoubtedly result in billions of dollars a year. Reportedly this money would be used to fund future job growth such as the huge infrastructure projects across the country.
Small and medium-sized investors would hardly notice such a tax, but major trading firms, such as Goldman, which reported $3.44 billion in profits during the second quarter of 2009, may see this as a significant threat to their profits. (The Hill)
The problem I see with this is that regardless if you are an active trader or just holding some retirement accounts, there will be some loopholes or work arounds that will ultimately pass the burden of cost onto the individual. Now to mention that short-term traders already have to pay capital gain tax. So in essence, we will be double taxed?
Now before we get too carried away with all the “what ifs” I have a hard time seeing this bill being passed as is. For one, the “wall street tax” must be international otherwise these jobs will be pushed oversees. Some law makers have recommended taxing sector-specific trades such as the oil industry, but again it seems if this bill will ever be passed it will only be a watered down version that would probably have no use other than to look like the government is taking proactive actions.
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What do you think of the “Wall Street Tax”? If passed will it prevent you from trading?