Finally, we have some good news for investors. Robert Herz has resigned from the FASB (Financial Accounting Standards Board). Why is that important? He and his cronies were responsible for pushing the economy off the cliff with their experimental mark-to-market regulations that made it impossible to bring companies like Lehman and AIG back from the brink. The repeal of mark-to-market in 2009 was the single biggest factor in the recovery we've seen in both the stock and bond markets. This is part of the Political Common Sense for America series.
Showing posts with label financial markets. Show all posts
Showing posts with label financial markets. Show all posts
Tuesday, September 28, 2010
Monday, November 30, 2009
Tax Stock Trades
Reps. Peter Defazio (D-OR) and Ed Perlmutter (D-CO) are proposing a 0.25 percent tax, or $0.10 per share tax, on the sale and purchase of financial instruments such as stocks, options, derivatives, and futures. The real problem is that the tax would effectively end U.S. dominance of financial markets.
We live in a highly competitive financial world where initial public offerings (IPOs) migrate to London when the process becomes prohibitively expensive or lengthy here. Do you really think this tax wouldn't drive trading to a location that was less expensive to transact business? Major U.S. financial institutions are already planning. The NYSE, EuroNext, OMX, and CME all have developed relationships in areas outside the jurisdictional reach of the U.S. Congress. If it means $50billion to $200 billion per year in cost differential between staying put or going overseas, do you think that the exchanges will sit by as their business is stolen offshore?
If this bill is approved, Congressmen Defazio and Perlutter will not be adding to our economy, but instead will be killing jobs and tax revenues. Can you say unintended consequences?
We live in a highly competitive financial world where initial public offerings (IPOs) migrate to London when the process becomes prohibitively expensive or lengthy here. Do you really think this tax wouldn't drive trading to a location that was less expensive to transact business? Major U.S. financial institutions are already planning. The NYSE, EuroNext, OMX, and CME all have developed relationships in areas outside the jurisdictional reach of the U.S. Congress. If it means $50billion to $200 billion per year in cost differential between staying put or going overseas, do you think that the exchanges will sit by as their business is stolen offshore?
If this bill is approved, Congressmen Defazio and Perlutter will not be adding to our economy, but instead will be killing jobs and tax revenues. Can you say unintended consequences?
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