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View Diary: Transaction tax would raise $350 billion over next decade (136 comments)

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  •  BoA already charges the per transaction fee (0+ / 0-)

    but it (usually) is applied to the merchant. In effect, by trying to charge the consumer it was "double dipping". The argument that the middle class will pay the fee for this because of their funds is interesting. Though most likely a smoke screen. Consumers already pay hidden fees to the managers of the funds. This tiny amount of cost doesn't seem like it would even show up on the average person's 401(k)

    GOP 2012 -- Austerity is just around the corner!

    by ontheleftcoast on Mon Nov 07, 2011 at 08:29:27 PM PST

    [ Parent ]

    •  Perhaps (0+ / 0-)

      BofA, and most other banks, didn't try to "double dip" until  the force of law capped their merchant dip. If BofA assessed about a 25 cent (?) transaction charge to the consumer, that would level things out. I suspect they will begin to do something like that slowly and on their less profitable accounts.

      For most high fee funds, the additional xaction tax will probably be undetectable because the fees are already so high. For low fee funds (admittedly the ones I was thinking of as those are the ones I invest in), I think the tax would become detectable as the manager would have nowhere to recover the tax from except by increasing their fees - obviously the manager isn't going to work for the charity of it all. Fairly small increases in fees can have a surprising effect over 40 years due to compounding coupled with the fact that one has to strip inflation (or "zero risk treasury" returns) off the fund returns before even thinking about the "real" returns. However, in absolute terms, probably only a few thousand dollars per middle class person over their life so not a big deal.

      •  Why "dip" at all? (0+ / 0-)

        The cost of the transaction is measured in fractions of a cent. Maybe adding them up over the cost of a month and showing charges for it makes some sense. But even then that's a stretch. Put it in perspective with the proposed transaction fee. A tax of 0.03 percent, on a $60 pair of sneakers, that would come to less than 2¢ and you think charging an order of magnitude more is "fair" to consumers? Sorry, but I don't.

        GOP 2012 -- Austerity is just around the corner!

        by ontheleftcoast on Tue Nov 08, 2011 at 01:02:51 AM PST

        [ Parent ]

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