Impact of tax reform on traders

Discussion in 'General Discussion' started by Challenger, Aug 14, 2017.

  1. Challenger

    Challenger Member

  2. Tim

    Tim Well-Known Member

    I note that the petition does not express opposition to a transaction tax. Even a small transaction tax would greatly cut down our profits.
     
    Teddy likes this.
  3. Harry

    Harry Well-Known Member

    Yes, a transaction tax would cut down profits. However, when I look at how India did this a decade back: they just eliminated long-term capital gains tax, and lowered the short term capital gains to 15% (I think). Yes lot of our strategies (split between trade and invest) will need to change to account for these, but if they can lower the annual tax and take a little in every trade - I do not mind. I did not read the petition fully so do not know what rates people are talking about for such transaction tax but I will be happy to pay 5 cents per contract if that reduced my federal capital gains tax to half.

    As per https://www.optionseducation.org/tools/todays_most_active_options.html: today 1.7 M SPX options were traded. If you count all instruments (indices, ETFs and stocks), you are probably talking about 10 M (very broad guesstimate) contracts per day. At 5 cents per contract, it comes to maybe 500K per day or 125 M per year -- in hindsight I think this is too small for our government to bite.
     
  4. Neil

    Neil Active Member

    My 2 cents. The government may consider or discuss tax reform but I don't think anything substantial will be happen - they'll keep the taxes as-is and then add additional taxes on top of what's already in place. I have no faith in the Republicans and no trust in the Democrats.
     

Share This Page

  1. This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
    By continuing to use this site, you are consenting to our use of cookies.
    Dismiss Notice