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View Diary: Senator wants to use gambling laws to regulate Wall Street (211 comments)

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  •  But (4+ / 0-)
    Recommended by:
    burrow owl, pattisigh, PapaChach, Puddytat

    where does that leave those of us who think that the states' restrictive gambling laws should be overturned for the illiberal, social-moralizing prohibitionesque idiocy they are?

    The continued resemblance of Wall Street to a badly-run casino is probably our strongest argument for why it is inconsistent and absurd to prohibit online gambling...

    "I, for one, would like to welcome our new Belgian overlords..."

    by Morus on Mon Nov 30, 2009 at 01:02:52 PM PST

    •  I'd like to see a small tax (12+ / 0-)

      on these stock transactions.  And a whole lot more regulations on Wall Street.  They can start by bringing back Glass-Stegall so banks can be banks and Wall Street gets their greedy hands out of the banks.

      The only way we will have real change is to get the money out of politics. Sue, West Allis, Wis.

      by Puddytat on Mon Nov 30, 2009 at 01:59:37 PM PST

      [ Parent ]

      •  I'd like to see a bigger tax... (5+ / 0-)

        ...say, close to 100%, on any profits from stock transactions that have been held for less than a certain amount of time (for example, 5-10 years).

        The idea here is to move the stock market back to being an investment rather than a gamble. It would also bring dividends back into favor, which would do much to restrain excesses as well...

        "Members of Congress should be compelled to wear uniforms like NASCAR drivers so that we could more easily identify their corporate sponsors."

        by radabush on Mon Nov 30, 2009 at 02:15:35 PM PST

        [ Parent ]

        •  Excellent idea n/t (0+ / 0-)

          The only way we will have real change is to get the money out of politics. Sue, West Allis, Wis.

          by Puddytat on Mon Nov 30, 2009 at 02:24:55 PM PST

          [ Parent ]

        •  So if someone had held (4+ / 0-)

          stocks for 4 years back in early 2008, but felt sure that the market had gone up so much that they wanted to diversify they no longer could as they would have to pay 100% in taxes.

          So, because of that they would hold on and hope that the markets doesn't go down for another year. At the end of 2008, this person would have lost 40% of their investment.

          I think this type of rule would end of killing the stock market as very few people would want tie up their funds for 5 years without the right to move it.

          And if you kill the stock market, you will lose revenue from capital gains taxes and businesses can no longer raise equity capital.

          By the way, the people that you are trying to go after would just move their funds to foreign markets with taxes that are lower than 100%.

          •  profits, not holdings (7+ / 0-)

            Ignoring the fact that the original hyperbolic suggestion is extreme and unworkable, let's look at some reality.

            If you're selling something at a loss, you're not paying taxes on it.  And losses can be used to offset profits in another transaction.

            My father went through this for the first half of the 1980s, so I recall it very well.  Between losing his 32 year old wife (my mother) to cancer, and a crappy market, we ate a lot of pan-grilled chicken and rice/noodles, not out.

            So, yes, personal experience.

            So getting back to reality in time frames, we used to have a 50% short term capital gains tax.  This prevented 'day trading' and too much speculation as long term capital gains tax (over a year?) was far lower.  It's like 20%/10% now.  Ridiculous that someone can work their ass off and pay a higher tax rate than someone NOT laboring.

            Why is that?  Because Wealth writes the legislation, not Labor.

            Political Compass: -7.13, -5.13

            by thiroy on Mon Nov 30, 2009 at 02:50:13 PM PST

            [ Parent ]

            •  re: labor paying higher taxes than owners (3+ / 0-)
              Recommended by:
              gjohnsit, alizard, phonegery

              didn't Warren Buffett recently mention that his secretary pays a higher effective tax rate than he does?

            •  Only an American would complain (0+ / 0-)

              about chicken and rice as a steady diet.

              Little comments like that keep reminding me how very far our standard of living can fall before anything important is affected.

              Gee, Christmas tree lites are five bucks a string! Guess we'll do without this year.

              Better not use the old ones outdoors, they'll last years long indoors.

            •  You forget... (0+ / 0-)

              ...that someone has ALREADY paid income taxes on the money that is being invested.  So of course they should pay a lower tax rate on the returns.  

              You all need to get away from the idea that investing is inherently evil.  How do you think companies get the money to expand, create jobs, etc?

          •  Yep. A liquidity discount would get priced in. (0+ / 0-)

            Simple enough.

            Revolutionary Road was an awful, awful film.

            by burrow owl on Mon Nov 30, 2009 at 03:22:01 PM PST

            [ Parent ]

        •  An investment is a long-term gamble (1+ / 0-)
          Recommended by:
          burrow owl

          No difference morally, or practically.

          •  Not true (1+ / 0-)
            Recommended by:
            inclusiveheart

            Granted there is risk in any investment, but that is not the same thing as a gamble.
             Would you consider opening a small business the same thing as gambling in Vegas? Probably not. So risk != gambling.

             As for a long-term investment on Wall Street, consider the idea of dividends. Dividends, when Wall Street still paid them out, was like getting interest on a bond. At one time it was the real purpose of buying stocks.
              However, today people buy stocks to bet on the price of the stock in the future. Dividends are an afterthought, and that is what is wrong with Wall Street.

            "The people have only as much liberty as they have the intelligence to want & the courage to take." - Emma Goldman

            by gjohnsit on Mon Nov 30, 2009 at 04:00:24 PM PST

            [ Parent ]

          •  No it is a risk - not a gamble - that is assuming (0+ / 0-)

            that your investment is made in something that is a known quantity and that has a "real" value in the marketplace.

            In the arena of mortgage backed securities, houses that were worth nothing were so heavily speculated upon that their values in that arena were ten, twenty and even sometimes forty times their actual value after the trades were done.  These people were so off the rails that they would have done speculative deals that apartments in Chicago's infamous Cabrini Green would one day in the not too distant future would be worth a million bucks a piece.  That's the kind of fantasy they were engaging in.  They were selling these instruments as if every one was going to be a winning lottery ticket.  Even the people who play the lottery on a regular basis would not have bought into that bullshit - they at least know that the odds of winning their bet are low at best.

        •  such a tax (0+ / 0-)

          approaching 100%, with such a long time limit, would hinder legitimate trading. The idea is to curb the excess, not shut down the entire market.

          And it should go without saying that there's no way in hell such a draconian tax would ever make it thru Congress.

          I think a more reasonable policy would be to impose a tax of, say, 30% on profits from stocks held less than a week, and say 15% on positions held less than a month. Or something like that.

      •  two very powerful, very simple ideas (4+ / 0-)
        1. bring back Glass-Steagall--the reasons it was passed in the first place have not changed; and
        1. impose a transaction tax of some fraction of a cent on every trade. Immediately, Goldman Sachs et al are either paying significantly more in taxes to the government, or they cease destructive/anti-competitive trading practices.

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