17 ms·

I think he understands it just fine. Implement a tax that requires people to actually buy stock for reasons other than its price. Make it too expensive to trade

by sgk284 16y ago

I think he understands it just fine. Implement a tax that requires people to actually buy stock for reasons other than its price. Make it too expensive to trade millions of shares every second to make small fractions of a return. Make people buy shares because they want to see the company succeed, not to make a quick buck. Back to basics. I kind of like the idea.

sitmaster 16y ago
More like back to the stone age. Look at the Indian stock market: they have transaction taxes on the order of .01-0.1% and the bid-ask spreads are huge. A tax like this would make it even more difficult for average people to get a fair price.
anamax 16y ago
> Implement a tax that requires people to actually buy stock for reasons other than its price. Huh? I buy stock to make money. I make money when I buy at a lower price than I sell said stock. Note that price plays a role in both transactions. Serious question - who buys stock for reasons other than price expectations?
- yummyfajitas 16y ago
  Some people buy (a small number of) stocks for dividends. But that's very rare, since dividends are taxed twice while capital gains are taxed only once.
vecter 16y ago
I don't think you understand that people who make markets (add liquidity) decrease YOUR investment costs. These market makers can only trade millions of shares per second (a vast overstatement) IF there is actual demand for that. Suppose there is such demand. Then, the market makers are providing a valuable service by supplying liquidity for people who want to buy or sell. A sales tax would vastly increase costs for everyone involved. Your parents pension fund would generate lesser returns because it costs them more to enter and exit positions. Your "back to basics" quip is bullshit. What does "going back to basics" even mean? People trade because they think they can make a profit or hedge their risk. That's all there is to it, nothing "more basic".

by sgk284 16y ago

sitmaster 16y ago

More like back to the stone age. Look at the Indian stock market: they have transaction taxes on the order of .01-0.1% and the bid-ask spreads are huge. A tax like this would make it even more difficult for average people to get a fair price.

anamax 16y ago

> Implement a tax that requires people to actually buy stock for reasons other than its price. Huh? I buy stock to make money. I make money when I buy at a lower price than I sell said stock. Note that price plays a role in both transactions. Serious question - who buys stock for reasons other than price expectations?

yummyfajitas 16y ago
Some people buy (a small number of) stocks for dividends. But that's very rare, since dividends are taxed twice while capital gains are taxed only once.

vecter 16y ago

I don't think you understand that people who make markets (add liquidity) decrease YOUR investment costs. These market makers can only trade millions of shares per second (a vast overstatement) IF there is actual demand for that. Suppose there is such demand. Then, the market makers are providing a valuable service by supplying liquidity for people who want to buy or sell. A sales tax would vastly increase costs for everyone involved. Your parents pension fund would generate lesser returns because it costs them more to enter and exit positions. Your "back to basics" quip is bullshit. What does "going back to basics" even mean? People trade because they think they can make a profit or hedge their risk. That's all there is to it, nothing "more basic".