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Forum Post: need some comments on my idea about How to transform the Wall Street into a money making machine of the US government

Posted 12 years ago on Dec. 4, 2011, 5:20 p.m. EST by hkchow (0)
This content is user submitted and not an official statement

We all know that the Wall Street is the world biggest gambling place. But beside betting, the similarity between the Wall Street and a Vegas casino ends right there.
When you go to a Vegas casino, you will notice the casino is a well organized place. Surveillance cameras are everywhere, it is very difficult to cheat. And the Nevada State laws make sure the casinos don't gauge the gamblers, pay their tax, and gamblers pay their tax after winning a jackpot. This allow Nevada residents to pay much less sales tax. Some casinos in Macau collect entry fee. Singapore casino collect a $70 entry fee. These fees really don't stop gamblers from going to the casinos to play the game of chance. So the big idea is, the Federal government must collect more fee on all the trading on all financial products. In another word, if you want to place a bet on Wall Street, buy a ticket first. These fees will generate hundreds of billions of dollars of revenue for the federal government.
The Wall Street is the biggest stock trading place in the world. Wikipidia states that 2008 NYSE average daily trading volume is 158 billion dollars. And there are so many other products like commodity and so on, investors and bankers from all over the world come to play their speculative games. The Wall Street is a huge asset to our nation. We should be proud of it. But now, Occupy Wall Street.... It is now becoming a very sad and shameful place.
How do we bring back the glories of the Wall Street? Simple, we need to transform the Wall Street into a money making machine of the US government. Say 0.3% of $158 billion per day, that is $121 billion per year just from NYSE alone ( based on 256 trading days).
We all have to pay extra fees to the government when we spend money all the time. Buy airplane tickets, pay phone bills, buy gasoline.... all have some fees pay to the government plus sales tax, property tax.... These are big burden to the US citizens. Why should we pay so much fee when we spend money when Wall Street bankers make huge amount of profit pay relatively little tax? The biggest business transactions are all taking place on Wall Street. How are they contribute to the US government? Take an example on stock trading fees. Now a days, a few dollar per trade is very common. Fee for computerized trade is only few cents. These are the transaction fee pay to the brokerage companies and this cost is obvious very low. With huge trading volume, brokerage companies make great profit. The brokerage companies then pay tax to the government. But the brokerage companies always find ways to hide their income. At the end, The government gets very little. So if our government wants to make money on the stock transactions, they must collect fee on each trade. Just like we pay government fee when buying airplane tickets, we pay the fee right there at the purchase. There is no way to evade taxation this way. Wall Street don't need to worry about this. Imposing a $3 fee on each trade is not going to stop investors from trading. What about capital gain? Tax from capital gain income for security trading, commodity trading and all financial product speculation should be increased. Tax return should have a higher tax bracket for that. Now the Obama government is proposing a higher tax rate on the riches. Some argue this will weaken the investing strength of US business. True, we can't treat all the riches the same. Business like factories, restaurants, stores, they all need money to improve and expand. Industries also need R&D money. The government should not increase their cost. The government should not take away business owner's incentive. Now the cost of doing business is high and running a business is risky as ever. Entrepreneurs really have to do magic to make some money. Why do they want to go through all these trouble investing more money on a business when they can make easy money on Wall Street. The risk is probably the same. Hence less new jobs for the average wage earners and more income for the Wall Street traders. Increase capital gain tax on speculative security trading is to increase the cost on this type of earning. It will push the funding back to where our economy is needed.
And there is computerized trading. Is it helping our economy? Not. What is computerized trading? Please see http://topics.nytimes.com/topics/reference/timestopics/subjects/h/high_frequency_algorithmic_trading/index.html Computerized trading is also known as high frequency trading which accounting for 60% of all shares traded on Wall Street. Huge volumes can be traded in milliseconds. It is purely a speculation tool yet it has profound negative effects on stock market. The 1987 crash and the 2010 flash crash are caused by it. It makes the market more volatile and very unpredictable. Why is the government not doing anything about it? Canada, European and other countries are preparing regulation, tax or cracking down on this practice. I propose the US government collect heavy fee on this activity. The fees should be exponentially reverse proportional to the time between buy and sell. That means a trade take place in milliseconds will pay a very high fee. The SEC is installing a high power monitoring system to monitoring all trade activities. But monitoring is not enough. My proposed method not only can reduce computerized trading, reduce stock market volatility, US government can also make good money this way.
The United States is losing competitiveness on all industries. But we have the best brand names, biggest companies in the world, most innovate people, biggest consumer market. How can we lose? The biggest companies are registering their headquarters overseas, putting their factories in China, call center in India. We've got nothing but a huge negative cash flow. But what we have is the Wall Street. It is our nations crown jewel and it is not going anywhere. US government must capitalize on that.
My proposed ideas will help US government generate hundreds of billion dollars income annually. But we all know that Wall Street has the biggest lobbying power in Washington. They will do anything to stop these fees. Wall Street bankers will cry high cost of trading can slow down the economy. Ignore them. If they don't like that, go bet on China's stock market.
The president and the congress should put all their focus on reducing fiscal deficit. My proposed ideas not only will help that tremendously. It will also steer capital back into the industries, reduce stock market volatility. Government has money is a stronger government. These benefits will only make our economy healthier. The end result will actually make the Wall Street even more valuable.

Summary Wall Street is our nation's crown jewel and it is not going anywhere How to transform Wall Street into a money making machine of the US government • Collect more fees on all types financial product trading
• Fee per trade on all financial product • Higher capital gain tax on income from financial product trading • High fee on computerized trading

Goals and Benefits • Generate significant revenues for the Federal Government
• Reduce Federal fiscal deficit • Stabilize stock market • Steer investment funds back to the industries • Stabilize US economy • Make the Wall Street more valuable



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[-] 1 points by FrogWithWings (1367) 12 years ago

Abolish it and all other wealth extraction endeavors in this country.

One should only garner wealth from product of which one adds value.

[-] 1 points by RMD2theteeth (11) 12 years ago

The Federal government doesn't have a revenue issue, it has a spending issue. That means that PLENTY of taxes are being paid by everyone but the government spends too much. If new taxes were needed, an email tax would be fair, a fee on every email would generate lots of revenue for stupid Leftists to squander chasing rainbows and fairy tales.

[-] 0 points by ronjj (-241) 12 years ago

We will never tax enough to pay for our wants and waste.

If the latter two are not attacked first, taxing more is very, very futile. I can only expect that I will eventually have to put a dime in the federal coin box everytime I flush my toilet. Paying taxes on the water in the toilet already is enough to make me wait and "go" over at my friend Ray's house.