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View Diary: updated:The Horror! EU proposes introducing Financial Transactions Taxes! (101 comments)

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  •  Won't do that... (3+ / 0-)

    It won't do anything to stop many derivative transactions.  The thing is .01% is nothing to most people and on anything more than a day trade will barely be noticed.  Put it this way on a billion dollar transaction that is $100,000.  Buying a billion dollar derivative with the expectation of making 1% or $10 million, that $100,000 is a not issue.

    The business this impact is taking $10 million and making several trades with the goal to make 1% which is $100,000 and doing that over and over again.   If it takes 20 trades to do that you have traded $200 million and pay $20,000 in taxes on your $100,000 return.  

    So, a transaction tax is about the day traders and the guys trying to make money off volatility and Goldman Sachs ultra fast computerized trades that jump in front of its customers trades to steal a fraction of a percent on each trade.

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