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Traders Tax: H.R. 4191 (H.R. 1068) in Congress Now


I don't post in here often, but look through the forum here a lot. I just got an email an about this new traders tax bill in Congress now. From what I understand this could ruin day trading for everyone.

The email had a link to go to and sign a petition to send to U.S. Congress.

I just signed the petition and figured all the traders in here would want to as well as it is very important they don't pass this bill.

www VoteNo1068 com (this link no longer works so disabled)

edit: Link to H.R. 4191 http://www.govtrack.us/congress/billtext.xpd?bill=h111-4191
Click image for original size
pelosi1
Hey guys, I have a question and maybe I missed it on this thread.

If this tax is passed and trading volume dries up because of this, who will be left to tax? Will the tax still be collecting the proposed $140 billion if it has scared everyone away? How will it the 'tax' be successful if its trying to 'deter' us speculators and daytraders.

Sorry for the random post 'weigh in', but I am just as concerned as everyone on this topic.

Avid
Right on Avid. Anyone heard of any new developments on this 1068 baby??????
Looks like we need a new thread. Five days ago they reintroduced this as HR 4191:

http://www.govtrack.us/congress/billtext.xpd?bill=h111-4191

I guess if they get too much heat they change the name until they can sneak it by. I know many still have hope, but I think they are so determined, and with that super-majority, it's just a matter of time. Green Trader Tax blog is still a good source for latest thoughts:

http://www.greencompany.com/blog/index.php
Originally posted by jimkane

Looks like we need a new thread. Five days ago they reintroduced this as HR 4191:

http://www.govtrack.us/congress/billtext.xpd?bill=h111-4191

I guess if they get too much heat they change the name until they can sneak it by. I know many still have hope, but I think they are so determined, and with that super-majority, it's just a matter of time. Green Trader Tax blog is still a good source for latest thoughts:

http://www.greencompany.com/blog/index.php


Thanks for the update Jim, I updated the Topic Title and added the new link to the OP.
Couple things I noticed in the new revision of the house bill...

"Credit for First $100,000 of Stock Transactions Per Year."

As expected, this will be the aggregate total value of all instruments traded for the entire trading year.

FUTURES- There is hereby imposed a tax on each covered transaction in a futures contract of 0.02 percent of the value of the instruments involved in such transaction.

Now one question that I have is, what is the definition of "the value of the instruments" ? Is it the notional value of the underlying cash (spot) market we have been talking about or something else perhaps ?


Exception for Retirement Accounts, etc- No tax shall be imposed under subsection (a) with respect to any stock contract, futures contract,


Would traders take advantage of this provision ?

Effective Date- The amendments made by this section shall apply to transactions occurring more than 180 days after the date of the enactment of this Act.

Not retroactive to this current year, thankfully. I was concerned they would slide this in before Jan 1. and then we would owe back taxes on all the transactions already completed for this entire trading year.
PT, I think by 'value of the instrument' they mean the obvious multiply the ES at any time by the $50/point to get a total value. There isn't anything that implies anything different to me. So, with ES at 1100 that's $22 per RT, as mentioned before. The big impact will be the disproportionately huge cost for stocks, which, of course, the ES is made up of. You can't drastically affect the 500 components and assume the derivative product will remain mostly unchanged in behavior.
Originally posted by jimkane

PT, I think by 'value of the instrument' they mean the obvious multiply the ES at any time by the $50/point to get a total value. There isn't anything that implies anything different to me. So, with ES at 1100 that's $22 per RT, as mentioned before. The big impact will be the disproportionately huge cost for stocks, which, of course, the ES is made up of. You can't drastically affect the 500 components and assume the derivative product will remain mostly unchanged in behavior.


Thanks for the clarification Jim.

$22 per RT is going to be very steep for a scalper. Here we are sweating over every single penny per contract of cost in commissions. As you said in an earlier post, if you figure out your average profit per trade per contract, I suspect most short term traders cannot cover that $22 on average across say their last 1000 completed round turns. Might be an interesting survey, can anyone cover $22 per RT on average ? That's just to break-even !!!
One thing I forgot to mention above is:

I see nothing in the new house bill mentioning or implying anything about FOREX. In which case we can move to EUR/USD ,it's a no brainer since I watch it all day already... lol

We can then all sell the USD and buy the AUD or JPY all day long in protest of the traders tax. Help the FED drive the USD straight to zero...
Originally posted by pt_emini

One thing I forgot to mention above is:

I see nothing in the new house bill mentioning or implying anything about FOREX. In which case we can move to EUR/USD ,it's a no brainer since I watch it all day already... lol

We can then all sell the USD and buy the AUD or JPY all day long in protest of the traders tax. Help the FED drive the USD straight to zero...



That is an excellent idea. Want tax come get it!!!!!!!!!!!! Political Muscle versus Trader Brains.
Bruce we haven't had any contribution from your end??? Guru say something.
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