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Campaign 2016 Part XI: the Two Party Problem

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Re: Campaign 2016 Part XI: the Two Party Problem

Rover said:
Not too much I wouldn't think. The theory is that if you taxed the trading of whoever's managing your retirement fund for example they'd pass those costs onto you in the form of higher fees. That might be true to some extent but there's a limit as to how much of an increase they could sock you with. Frankly I like the idea of limiting this to just high speed trading as that's not skill related but just a computer capitalizing on a fractional difference in a share price.

I also agree with the dismissal of the notion that trading would go elsewhere. New York and London are the big trading centers. You're not going to outsource the exchange to Vietnam in order to get away from this tax.
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I can't speak to any accounts under management by my employer that are outside my group's domain, but all taxes and fees charged by outside entities (foreign governments, the SEC, etc.) are enumerated and passed through to the client without any markup on our part. Our commission is also listed as a separate item for each trade. We go to great attempts to make all transactions as transparent as possible between us and our clients.
 
Re: Campaign 2016 Part XI: the Two Party Problem

St. Clown said:
I can't speak to any accounts under management by my employer that are outside my group's domain, but all taxes and fees charged by outside entities (foreign governments, the SEC, etc.) are enumerated and passed through to the client without any markup on our part. Our commission is also listed as a separate item for each trade. We go to great attempts to make all transactions as transparent as possible between us and our clients.
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This is all good. What I'm curious about in terms of high speed trading is for whom is the majority of that trading done for? As in the companies themselves making easy money via a sophisticated computer driven model or are they doing this on behalf of clients? I don't know the answer to that as I've been out of that business for awhile now.
 
Re: Campaign 2016 Part XI: the Two Party Problem

Rover said:
This is all good. What I'm curious about in terms of high speed trading is for whom is the majority of that trading done for? As in the companies themselves making easy money via a sophisticated computer driven model or are they doing this on behalf of clients? I don't know the answer to that as I've been out of that business for awhile now.
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Well, then you're looking at taxing mutual fund trusts, who will pass along their taxes to fund holders, which will mostly be the general public. Investment banks and brokerages will get hit more, too, likely the most. Stock purchase plans offered through employers could see a big uptick in their taxation rates, too, since Bobby in marketing wants to sell on day X, while Suzy sells on day Y. Like you said, with many smaller trades you lose out on fractional rounding issues during sales. Most of the fees are aggregated into pools, forming what's essentially a single-asset mutual fund. Purchases, for the most part, would still be limited to the payroll cycle and therefore not impact quite as much.
 
Re: Campaign 2016 Part XI: the Two Party Problem

Kepler said:
I Snopesed this to see if he actually had said it, or if it was the usual Echo Chamber context ploy, but nope, it's true he really did say it. However, there's a great stinger in the tail that it apparently led to a righty tin foil narrative of Marine Todd-level idiocy.

Those folks never disappoint.

OTOH, that lapel pin is genuinely funny, marking perhaps the only recorded instance of a righty having a working sense of humor.
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I know you and I have discussed the lapel pin before. I've always wanted one because it's a fantastic inside joke to those who get it.
 
Re: Campaign 2016 Part XI: the Two Party Problem

Rover said:
Not too much I wouldn't think. The theory is that if you taxed the trading of whoever's managing your retirement fund for example they'd pass those costs onto you in the form of higher fees. That might be true to some extent but there's a limit as to how much of an increase they could sock you with. Frankly I like the idea of limiting this to just high speed trading as that's not skill related but just a computer capitalizing on a fractional difference in a share price.

I also agree with the dismissal of the notion that trading would go elsewhere. New York and London are the big trading centers. You're not going to outsource the exchange to Vietnam in order to get away from this tax.
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Agreed. HFT takes advantage of a "bug" that simply isn't available to even the well above average schmo. I am ok with regulating/taxing these transactions.

Also agree on that last paragraph.
 
Re: Campaign 2016 Part XI: the Two Party Problem

Almington said:
Your mutual funds expense ratio would likely at least double.
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It's a good point that these would hit pension funds and 401(k)s (investments that are not managed day-to-day by their owners), but I'm OK with that. We need the revenue to fix bridges, and might as well be taxing the kind of people who own investments as opposed to more sales taxes on goods and gas... half the people in my circle don't have anything at all invested outside their home equity. And it would depress willy-nilly day trading and speculation & insider trading & other fraud.
But most mutual funds are not making rapid regular adjustments, right? I don't know for sure, but I picture your average S&P tracker investment fund or Emerging Market Fund to be making a trade from their pool maybe once a week or month. And the 0.5% to be taxed on the portion of the portion of the equity that was traded, which might be 2% (that's a high guess) of what is in the whole fund. So it doesn't seem like much of a drop in the bucket of total management fees. Obviously it would affect them somewhat, but "double"? Also, if it passed it would create a new disincentive to trade which would slow the rate at which trades happen (and drop the revenue that's being projected from the tax, no doubt)
I'm not sure on a lot of this but it seems like a good idea.
 
Re: Campaign 2016 Part XI: the Two Party Problem

Interesting 538 round table on NY.

tl; dr: Clinton +15, she successfully fights back the narrative that Bernie will overtake her; Clinton +5, nothing changes, this race is still an ambivalence wrapped in an ambiguity wrapped in a sweater; Sanders +5: Sharknado!

My bet is Clinton +11 as she continues wheezing and shuddering towards Bethlehem.
 
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Re: Campaign 2016 Part XI: the Two Party Problem

Kepler said:
Interesting 538 round table on NY.

tl; dr: Clinton +15, she successfully fights back the narrative that Bernie will overtake her; Clinton +5, nothing changes, this race is still an ambivalence wrapped in an ambiguity wrapped in a sweater; Sanders +5: Sharknado!

My bet is Clinton +11 as she continues wheezing and shuddering towards Bethlehem.
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As I've said before, love or hate Hillary or Bernie, but there are no more moral victories. Sanders needs to win more delegates than Hillary in New York. Anything less than that and he's getting that much closer to the end of the runway. Its not any more complicated than that.
 
Re: Campaign 2016 Part XI: the Two Party Problem

I think HRC wins very comfortably in the cities. I'll be very interested how Bernie does in the rural areas.
 
Re: Campaign 2016 Part XI: the Two Party Problem

geezer said:
But most mutual funds are not making rapid regular adjustments, right? I don't know for sure, but I picture your average S&P tracker investment fund or Emerging Market Fund to be making a trade from their pool maybe once a week or month.
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Wrong. Mutual funds are some of the highest volume traders there are in the markets. By definition, a mutual fund is a collection of investments of at least 20 underlying assets, but could have hundreds to thousands of underlying assets that make up the fund. There are limits as to what percentage a fund can be invested in a single asset, which will trigger automatic sales and purchases for various assets within the fund. Those values are set by the fund manager or management team. While the fund may own $10mm in that asset, due to market fluctuations and the stated goal of the fund within the prospectus, the fund may have to sell a certain amount of its underlying asset or purchase more of said asset to meet prospectus goals and investor expectations. And it happens everyday, sometimes multiple times each day. Add to that, if it's an open-ended mutual fund (most are), new cash intake has to be invested daily when its cash on hand exceeds certain thresholds. As simple as a mutual fund sounds, it's really a complicated situation for someone not familiar with them to try to understand.
 
Re: Campaign 2016 Part XI: the Two Party Problem

St. Clown said:
Wrong. Mutual funds are some of the highest volume traders there are in the markets. By definition, a mutual fund is a collection of investments of at least 20 underlying assets, but could have hundreds to thousands of underlying assets that make up the fund. There are limits as to what percentage a fund can be invested in a single asset, which will trigger automatic sales and purchases for various assets within the fund. Those values are set by the fund manager or management team. While the fund may own $10mm in that asset, due to market fluctuations and the stated goal of the fund within the prospectus, the fund may have to sell a certain amount of its underlying asset or purchase more of said asset to meet prospectus goals and investor expectations. And it happens everyday, sometimes multiple times each day. Add to that, if it's an open-ended mutual fund (most are), new cash intake has to be invested daily when its cash on hand exceeds certain thresholds. As simple as a mutual fund sounds, it's really a complicated situation for someone not familiar with them to try to understand.
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IIRC there was a management fee, and administration fee, what I'll call a regulatory fee, and a transaction fee. I'm assuming a tax would roll into the transaction fee although I suppose they could stick it in regulatory fees.
 
Re: Campaign 2016 Part XI: the Two Party Problem

joecct said:
I think HRC wins very comfortably in the cities. I'll be very interested how Bernie does in the rural areas.
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The boroughs are going to be interesting. The Bronx is the most black, and the whites are old and doddering, so that's probably Clinton by a large amount. Brooklyn is the next in size of black population, but the whites are (notoriously) young, educated, and p-ssed off, so Bernie should do OK. Manhattan is very white but it's Manhattan, so what Clinton loses in diversity she should make back in soullessness. Queens is a bizarre place. It's changed 8 times since I left L.I. and for all I know it's majority Hung or Jamaican or Somali. God knows what happens there. Staten Island (i.e., Eastern New Jersey) is a bunch of wise guys and Irish too drunk to find Southie; I'm not sure there are even any Democrats there.
 
Re: Campaign 2016 Part XI: the Two Party Problem

Rover said:
IIRC there was a management fee, and administration fee, what I'll call a regulatory fee, and a transaction fee. I'm assuming a tax would roll into the transaction fee although I suppose they could stick it in regulatory fees.
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Regardless of the classification, depending upon the size of the tax, it could have a serious impact on the average person's 401k or union member's pension. If it were a few pennies per transaction, much like the SEC fee, it'd be no big deal. If Bernie's trying to provide free college to all state schools, then you're looking at a serious impact to the average person's retirement. Those fees charged by mutual fund companies eat into the effective annual rate of return, reducing the power of the compounding IRR.
 
Re: Campaign 2016 Part XI: the Two Party Problem

Somebody summarizes this election perfectly.

Needless to say, what is said about Hillary could be said about the GOP at 10x the strength.
 
Re: Campaign 2016 Part XI: the Two Party Problem

St. Clown said:
Wrong. Mutual funds are some of the highest volume traders there are in the markets. By definition, a mutual fund is a collection of investments of at least 20 underlying assets, but could have hundreds to thousands of underlying assets that make up the fund. There are limits as to what percentage a fund can be invested in a single asset, which will trigger automatic sales and purchases for various assets within the fund. Those values are set by the fund manager or management team. While the fund may own $10mm in that asset, due to market fluctuations and the stated goal of the fund within the prospectus, the fund may have to sell a certain amount of its underlying asset or purchase more of said asset to meet prospectus goals and investor expectations. And it happens everyday, sometimes multiple times each day. Add to that, if it's an open-ended mutual fund (most are), new cash intake has to be invested daily when its cash on hand exceeds certain thresholds. As simple as a mutual fund sounds, it's really a complicated situation for someone not familiar with them to try to understand.
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Well that shows how much I know... it's starting to sound like the unwary retirement saver could really get hammered by this tax, as Almington pointed out.
 
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