Our ever-expanding government and its enablers will tax everything that moves — and everything else. Their newest idea — taxing stock sales — ultimately hurts not the rich, but those who seek jobs.
Democratic Rep. Peter Welch of Vermont, a senior member of the House Oversight and Government Reform Committee's subcommittee on financial services, wants Uncle Sam to start taxing stock transactions.
Interviewed by disgraced ex-New York Gov. Eliot Spitzer — also known as "Client No. 9" — about imposing "a tiny little tax when stocks are traded on Wall Street" to "raise a huge sum of money and it would get rid of some of the high-velocity trading that does harm to the markets anyway," Welch touted his bill, co-sponsored by Rep. Peter DeFazio, D-Ore., to tax stock sales.
But rather than emphasize soaking the rich, Welch claimed with a straight face his tax would be healthy for the stock market. "This hypertrading," Welch said, is "about market speculation. It has nothing to do with liquidities in the market." Therefore "we should have a very small, fractional transaction tax" to discourage computer-assisted high-speed stock transactions.
In fact, high-frequency trading, which constitutes about 60% of trading volumes in U.S. equities markets, is in today's high-tech age a vital tool ensuring liquidity.
Tradeworx, the New Jersey-based high-frequency trading firm to which the Securities and Exchange Commission is now turning to educate itself on computerized trading, in 2010 warned the regulatory agency that "HFTs are the liquidity backbone of the market" and "an important part of the market's ecosystem for serving long-term investors."
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