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 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.

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