Congressman Sounds Off on Taxing Trades

" The -- I'm one congressman wants to tax the value of all trades one quarter of 1% that's the pipe in the Wall Street rescue -- Oh -- this week we had a man from the security traders association said this bill would kill the stock trading business. All right now meet the man who introduced the bill congressman Peter Defazio Democrat from Oregon congressman welcome to the program. I just want to make sure I understand exactly how it would water if if I do 100000. Dollar loss stopped trade attacks on map would be 250 dollars is that correct. Up to 250 dollars on an annual basis the secretary would look at our losses under TARP. And as of today the losses are calculated that little over a hundred billion. And then would assess the tax up to one quarter of 1%. At this point to be a little less than it be left the matter be less than a fifth of -- percent probably now you know that really would place a big crimp on the individual investor we have a gentleman on from the stock -- associations in the event that really votes. You -- concern on the that you know hunting the wrong guy because the bailout was the Wall Street investment banks in the banks not the individual investor."

" Well you know we heard this before actually 1932. When congress doubled the then tax of point 22 point 4%. Devastatingly diminish banking. The business threaten the country's banking structure possible closing of the stock exchange. The stock exchange at that point was that 41. Congress doubled the tax and use the money to rebuild America. And then of course the stock exchange went up to a thousand before the tax was allowed -- in 1966. The brits have attacks of one of one half of 1% of all trades on the London exchange I think people are still doing business there aren't --"

" Yes down well not pick up on the -- that congressman -- off but look if I trade at home and I'd trade electronically. I can it would try to have a seven dollars on the not by what had a quantity of stock seven -- that's what it cost me. So if I do a 5000. Dollar trade. With a tax of one quarter of 1%. I pay 1250 already almost doubled the cost of the transaction. Transaction costs mean a long to individual investor."

" You mean like they traitors to go on little tiny margins in turn. Well I get a -- live -- happy home for a little bit a little bit Musharraf did you know yet there are millions of people in America who do. At -- make a trade when they get home from my you are opposing a double that transaction costs. I don't think there's millions and I'm sure they won't have got half a more unstable economy -- because they -- the many entered into the yes yeah people are gonna get the bill one way or another. And we can either give it to all the taxpayers of America or we can target as best as we can on Wall Street. You know Citibank. I would hate America and all the critics at a time when the investment world is in such dire straits why would you. Well well I I don't think things were. They're not quite as bad as 1932 yet and congress doubled the tax and 32 it had no impact on the market. People just taken into their calculation and the trying get a little bigger margin may be up at three tenths of a percent profit or something big like that. And the question is what's the value and all that churning do you think there's value I don't outlook but all you so. If you trade from home it's joining us interest of men are reminded -- it is not invested in stocks in 1929. Then took back half -- that you cited 1932 it took until 1950 full law before you got your money back. But pay. Right ahead and I was the go ahead tax it's effective follow whipped us bottom of the -- with in the market let's kill penalties on there will would could chill running away at home. So -- if -- put it on the credit card. Is that what you think outlets like going to -- the dollar a few few years down the road. What what struck out our line of credit with the Chinese or maybe they start asking for some of I don't know why you don't we again I live in a way that's paid for that I don't know why you want to take it out behind the small investor value it has -- coming out a small investor it is I don't have a lot of constituents are trading that much on the market if they -- stock a lot of like people. Biased stock as an investor -- not for daily trade or ten times the daily -- I got a few people who do that I just tell your vote is don't come after you if the stock market goes down when you start imposing a tax and they -- it doesn't like they set in 1930 to destroy the market except I'm not into that Natalie I didn't say that I was contesting -- view that anybody who trades from -- whom. By an addict -- account for seven dollars is shown. But I'm not sound like they're not gonna -- if there if they're not churning. They're going to pay a one time very small tax and hopefully their profit will be greater than -- dollar -- forty dollars every time they make a trade. They going to be having acted transaction but we're talking about awfully frequent trading you know I mean that is not a lot that goes to turn it is something -- that's -- to follow it it's not occur on the -- this exhibit EMI -- China market for gambling is the stock market for gambling -- the stock market away for companies to raise the money only to invest only legitimate didn't that is that is our real economy kind of coincidence is that they -- eight. Doing a lot of speculative economy nor would do not want a financial stability I -- not quite sure you've gone to grips with the nature of -- best thing. If I may I didn't like I'm not gambling. I am not that I might have been favoring my viewing -- a -- going to double my transaction costs and you look at it historically. From investing in stocks you law. I oh I tell you get out of money on the day you get put your money in a bank. What do you do with a I think you'll still invested just have to go for a little higher rate of return of -- hold little little long now I hope I'm fortunate to get -- high rate of return in this month I know you're gonna go period we want to prop up the market compass you do -- get. Coming from -- you you you profit up and -- most interest me now if we brought it up by redoubling our bad -- into our country we appreciate it we appreciate all the help you can give to the market thanks."