Tell Congress to Block the Trader Tax

Sign the Petition : 57,977 Letters and Emails Sent So Far

On Friday, February 13, your colleague, U.S. Congressman Peter DeFazio, introduced H.R. 1068: "Let Wall Street Pay for Wall Street's Bailout Act of 2009", which aims to impose a 0.25% transaction tax on the "sale and purchase of financial instruments such as stock, options, and futures."

Without a doubt, many Americans are appalled at the reckless behavior of large Wall Street companies, and the notion of making those who are responsible for putting the global financial system in jeopardy help repay taxpayers for bailing them out is certainly justifiable.

Unfortunately, I feel that this proposal is the wrong way to do that, as this tax applies to all investors, the vast majority of whom have done no wrong. Effectively, this tax will punish anyone who wants to save their money, whether it be by investing in stocks or options directly, putting their hard earned money in any mutual fund, or by simply placing a portion of their paycheck in a 401K. There's no doubt that banks and mutual funds will pass along this added cost to their customers, giving this proposed tax a much further reach than was initially imagined.

Moreover, the unintended consequences associated with H.R. 1068 are also hard to ignore.

First, many hard-working Americans make their livings by running small businesses that trade stocks, options and other financial instruments. Many of whom will be put out of business due to the fact that their margins are often quite thin. In addition, those who work for or with these individuals will also lose their jobs.

Second, a transfer tax such as this will lower capital gains dollar for dollar, making the notion that anyone who invests their money will be on the hook for the excesses of Wall Street all that more poignant.

Finally, such a tax will undoubtedly affect the number of shares traded on an absolute basis, thus reducing liquidity "a necessary ingredient in the effective pricing of assets. It's the complete lack of liquidity, for example, which made collateralized mortgage obligations effectively worthless.

The body of the bill suggests that such a tax would have a negligible impact on the average investor. I beg to differ. For example, a $10,000 trade (or approximately 100 shares of stock in Apple, Inc.) would increase the cost of a round trip transaction by $50. 100 shares is generally considered to be a minimum size for a trade, which would devastate any small business executing even a handful of similar trades each day.

As you can see, while this bill may sound good on the surface, the effects, if it is passed, will reach anyone who wants to invest their money and will ruin many small business people who are not at fault for this distressing situation all Americans are struggling through.

I urge you to vote NO on H.R. 1068		Tell Congress to Block the Trader Tax

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People signing the "Tell Congress to Block the Trader Tax" petition!

  1. Sat., Nov. 7, 2009 1:31 AM    link Name not displayed | Fall City, WA

  2. Sat., Nov. 7, 2009 1:27 AM    link Gary W. | Southlake, TX

    Interest is less than 1% a year and a 1/2% tax per trade would kill the industry.

  3. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  4. Sat., Nov. 7, 2009 1:20 AM    link melanie m. | Santa Rosa, CA

    this tax would kill the individual investor and most middle class Americans are now investing their own IRA's - so ALL of retirement investing would be hit hard - INSANE!!!

  5. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  6. Sat., Nov. 7, 2009 1:01 AM    link Name not displayed | Steamboat Springs, CO

  7. Sat., Nov. 7, 2009 12:34 AM    link Don C. | Dublin, CA

    this tax would hurt me. I would probably stop trading if it was enacted. We are taxed enough!!!

  8. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  9. Fri., Nov. 6, 2009 11:29 PM    link Steve L. | Downers Grove, IL

  10. Fri., Nov. 6, 2009 11:18 PM    link Michael L. | Union, NJ

  11. Fri., Nov. 6, 2009 11:02 PM    link stuart l. | Houston, TX

    It is easy for Congressman to target"Wall Street" Why not tax
    the salaries of Congressman, because 1) their salaries never go down, 2) they give themselves pay increases whenever they want to, 3) they have health insurance that no one else in the USA could possibly afford; 4) they are FULLY vested in their retirement plans; 5) they receive an automatic COLA, which 90% of americans do not have [excluding social security]

  12. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  13. Fri., Nov. 6, 2009 9:47 PM    link stacy and jean h. | Metuchen, NJ

    As retirees who were seriously injured in the finacial collapse, this tax would hasten our demise........We are not Wall Street.

  14. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  15. Fri., Nov. 6, 2009 9:19 PM    link charles s. | Chicago, IL

  16. Fri., Nov. 6, 2009 8:01 PM    link Willie T. | Keokuk, IA

    I am a new trader trying to build my nest egg, I do not want to end up in quick sand; this unfair trader tax will drop me as well as many more investors there. Vote no on H.R. 1068

  17. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  18. Fri., Nov. 6, 2009 6:11 PM    link Name not displayed | San Antonio, TX

    I am an average investor, not one of the professional investors at Goldman Sachs, JP Morgan, or Lehman Brothers who got this country into a financial mess and took down the global economy. If you impose a trading tax, not only will I lose income, but I will have to go to look for work at a time when our economy is flat on its back and jobs are nonexistent.

    Instead of a trader tax, why don't you punish the individuals who committed securities fraud, namely the executives at Goldman Sachs and the other large Wall Street banks who packaged subprime mortgages and then sold them to unsuspecting investors overseas.

    Passing a law on trades doesn't solve the original problem, which is that Congress removed all the safeguards put in place by the Glass Steagall Act and allowed financial services companies to engage in commodities trading when Congress passed the Commodities and Futures Modernization Act.

    Congress caused this mess and Congress needs to clean it up. Taxing hard working individual investors is not only dumb but will alienate the public even more.

    Most of us think we deserve a better government than the one we have had in the last twenty years. Taxing the public more is not a solution; it is just one more example of a government out of touch with the times.

  19. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  20. Fri., Nov. 6, 2009 6:07 PM    link David T. | Lewisville, TX

    Horrible idea, would hurt market liquidity and efficiency. Like all taxes, would actually reduce government revenue while simultaneously further hurting the private sector. Just once, I'd like politicians to think about cutting spending instead of increasing taxes.

  21. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  22. Fri., Nov. 6, 2009 5:51 PM    link Name not displayed | Saint Louis, MO

    Bad idea for everyone, especially the small, individual inverstor. This bill in no way, penalizes "Wall Street", it penalizes "Main Street"

  23. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  24. Fri., Nov. 6, 2009 5:50 PM    link Name not displayed | Lake Stevens, WA

    We have to much government in our lives already

  25. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  26. Fri., Nov. 6, 2009 5:39 PM    link LARRY K. | Wichita, KS

  27. Fri., Nov. 6, 2009 5:38 PM    link Name not displayed | Prescott, AZ

  28. Fri., Nov. 6, 2009 5:37 PM    link Name not displayed | ,

  29. Fri., Nov. 6, 2009 5:31 PM    link Jesse L. | Venice, CA

    enough is enough!!!!!!!!!!!!!!!!!!!!!!!!
    Tax Congresses pay, sick & tired of these idiot's

  30. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

  31. Fri., Nov. 6, 2009 5:23 PM    link Mark G. | Burlington, CT

    Another tax for roads? Where does my already outrageously high gasoline tax go?

  32. This comment has been reported to the site manager. It will be reviewed and removed if inappropriate. Thank you!

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