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Author Topic: Tobin Tax. Anyone want to help me build the Tobin Tax website?  (Read 9336 times)
AyeYo
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July 08, 2011, 06:06:17 PM
 #81

Trading pokemon cards shouldn't constitute a contribution to "society".

Two people exchanging Pokeman cards are maximizing their utility, benefiting from the exchange.  This results in a betterment for society as 2 people gained something at the expense of nobody else.


Everybody is not entitled to benefits from a transaction. 

How you figure?  Can you give me an example of two people involved in a 'transaction' in which one (or more) parties do not benefit?  I think theft would be a good example, but can you think of anything else?


Guy, just ignore him.  He's a kid.  Stick to responding to the legitimate questions and arguments.


I'm interested in knowing whether you realize and/or care that this tax would destroy retailing trading, especially highly leveraged FX trading. 

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niemivh
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July 08, 2011, 06:10:23 PM
 #82

If you want an exchange with a Tobin Tax, then create one. Everyone who thinks it's a good idea will trade on it. Others won't unless you force them to. We'll then let people figure out how valuable HFT is.

Ugh.  This isn't how laws work.  I'm not suggesting it nicely and asking 'pretty please'.  Government should, can and has been used to promote justice, equality and fairness.  But only if people care to use it to do so.  Trying to do everything outside of the system will result in failure.  Nobody here has given me any rational reason as to why HFT is a good or moral or productive or beneficial thing.  Therefore it should be stopped.  This attitude of "I'm taking my toys and going home" does nobody any good, including yourself.

The way I look at it, natural law's point is a valid one. Go start your own bourse.

People cannot give a rational reason for every little perk in a corporate list of perks, but what they can ensure is that with a good possibility of takeovers, the perks remain at around the right level, neither too high nor too low. The way I look at it, if HFT is that harmful, then conservative business owners would float their shares in "slower" exchanges.

This is the bitcoin world. People don't complain. They compete.


The faux 'trump card' that libertarians use frequently is something along the following lines: "if you have to use force to enact anything then it invalidates your justification", and "force" is painted with as large a brush as possible.  I see this argument alluded to and used all over this forum.  For some, I'd say it's actually their prime "philosophical" mantra.  This 'reasoning' is so deeply flawed.  It gives special status to the status quo.  It makes enacting any means of justice impossible.  It reduces any attempt at social cohesion into an absurd exercise in futility.  But it's so easy; it's really more of an escape clause from deeper levels of understanding what justice is.  Things become very simple and cartoonish when you adopt this world view.  You identify problem "A" in the world but you can't do anything about it because that would require use of "force".  Within this ideology, the only thing you can do is to provide "choices" to people.  Understanding sociology and game theory exposes the absurdity of this position, much of what is viewed as 'choice' in a social context is nothing of the sort.  There really is so much I can say on this topic, but I'd rather hear what this forum has to say regarding a defense of this world view as popularized by Ayn Rand in Atlas Shrugged.


Just to show the absurdity of this argument I've created the following mad-libs below.  They are not a perfect comparasion, but I believe they get the point across.

If you don't like a multi-national corporation raping your country then start your own multi-national corporation.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how great your multi-national corporation is.

If you see problems with your culture then start your own culture.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a culture with your values are.

If you want to live in a state with your ideal conditions then start your own state.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a state with your ideal conditions are.

If you want to live in a country that it's a global empire then start your own country.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a country that isn't a war all the time is.

If you want to live on a planet where there is no war, poverty, disease, exploitation, misery and famine then build your own planet.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people see how valuable your planet is.


You can see that this idea makes reform impossible.  Hence its lack of merit.

I'll keep my politics out of your economics if you keep your economics out of my politics.

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niemivh
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July 08, 2011, 06:11:57 PM
 #83

Everything you bring up involve two parties transacting with the knowledge of the other party and both parties benefiting from the transaction.  Once again, how does this compare to the HFT?  Nobody's been able to answer this question, they just pull a red herring out or straw man and start harping on something I never said or insinuated.

If I put in a limit order to buy some sort of security and it gets fufilled by a HFT bot then I benefit by getting what I wanted. The HFT bot benefited assumingly by making a small profit. We both benefit. HFT is not a secret.  If I think a price is out of line with what I want to pay for something because of a HFT then I don't buy it. Again, there is nothing stopping anyone from creating a HFT-free exchange - unless there's a law against it.  Grin

I've replied to a similar response as this above this post if you care to read it.

I'll keep my politics out of your economics if you keep your economics out of my politics.

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July 08, 2011, 06:26:05 PM
 #84

Trading pokemon cards shouldn't constitute a contribution to "society".

Two people exchanging Pokeman cards are maximizing their utility, benefiting from the exchange.  This results in a betterment for society as 2 people gained something at the expense of nobody else.


Everybody is not entitled to benefits from a transaction. 

How you figure?  Can you give me an example of two people involved in a 'transaction' in which one (or more) parties do not benefit?  I think theft would be a good example, but can you think of anything else?

I think that an apple looks delicious.  I buy it from a vendor.  He benefits.  Turns out the apple is rotten.  The vendor did not know it.  I do not benefit.
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July 08, 2011, 06:40:01 PM
 #85

Why not just straight up ban HFT?  

http://www.freakonomics.com/2011/03/28/should-high-frequency-trading-be-banned-one-nobel-winner-thinks-so/

Technically its difficult as it can move a lot of trade into the shadow banking system.  But retail investors are being gouged by the system right now so hopefully some way can be found to handle it, ideally in the exchanges themselves.

The thing to understand is that HFT is a forced, private tax by the parasites against the real economy.  By imposing a 1% tax on transactions legitimate business would be benefited as the HFT wouldn't be allowed to occur.  And if the HFT moved into the shadow banking system who would they be sucking off of?  They can't simply all suck off each other as HFT is reliant upon the real economy to provide its 'host capital'.  A shadow trading exchange without a Tobin Tax (after it was implemented) would be so filled with HFT that no legitimate trader would touch it.


I understand this 100%, but how are you figuring that a laughably small 1% tax (I'm assuming that'd be 2% round trip) is going to curb HFT?  2% knocked off of tens of billions of dollars still leaves them with tens of billions of dollars.  That's like shooting a firecracker at an aircraft carrier and expecting it to sink.

Yes, it'll most certainly pay for itself and generate revenue, there's no doubt about that.  I just don't see how it's going to even put a dent in HFT.  If we're really going to make an honest effort to stop HFT, rather than just share a tiny portion of the profits with the public, then let's try a little harder.  Why affect an across the board transaction tax at a fixed 1% when we could have no transaction tax for securties/currency held for more than say, one day, maybe a 2% round trip tax on securties held less than one day, a 5% tax on securities held less than one hour, and some very high, say 50%, on transactions that round trip in under 10 seconds.  These taxes could be round-trip fees and charged on the completion of the trade, just to keep things simple.

IMO, that would eliminate HFT or sharply curb it.  Due to this, it would probably generate less revenue than the Tobin Tax, but I don't think this should be about revenue, I think it should be about eliminating HFT.

They are using HFT to garner a tiny fraction of a percent of profit on the trade.  Each trade in a hyper-trading trade, yields a miniscule fraction of a percent in profit, point being much less than 1% that the tax would take on each transaction.  If you are going to make a trade that would yield you a 0.0034% profit and you're going to have to pay a 1% tax on that transaction it becomes obvious that only people making long term investments would be trading, which is what we want (if we want a functioning, productive economy).


That makes more sense.  I was assuming the 1% was taken off the profit from the trade, not the full value of the trade.

Since that's the case, this would absolutely demolish retail traders.  I'm fully against it.

If you think traders that are seeking to make speculative profits would be 'demolished' paying a 1% tax I guess that's your interest to uphold.  Not to make this about me, but just for an example, I pay more than 25% of my income in taxes, a large amount in property taxes and others.  Most people pay sales taxes on everything they buy, but if those who's 'work' consists of buying and selling scrips of paper that represent other peoples work, ideas and productive capacity can't afford to pay a scant 1%, I understand.  It is a 'free market' we are trying to uphold here.  I guess they will pay when they pay that 15% capital gains that they are working so hard to eliminate.  What you say?  Deferred taxation on earnings?  Never heard of it.

I guess the non-day traders need to start asking the question: how long can we stay the 'world leader' (or even a desirable place to live) with so many people making so much money off of doing absolutely no productive work?  Some speculation 'greases' the liquidity market, etc and that's all fine.  But at what point do we have an excess of speculation?  If the financial sector makes money on a host of non-productive and anti-long-term policies that adversely affect myself and my country how long should I stand for it?

I'll keep my politics out of your economics if you keep your economics out of my politics.

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niemivh
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July 08, 2011, 06:43:37 PM
 #86

I actually think this is a good idea, maybe I'm just too cynical, but this is what would happen in the real world if some government forced it upon all markets. The big HFT players would eventually get re-classified as a special type of market player with some government "license", let's call it "market maker trader" where they don't have to pay the tax. Now, suddenly they have an even more competitive advantage than that of what you claim them to have now. Now you really can't compete based on your own ability because you have to pay a lawyer to comply with the regulations to protect yourself from the hand of the state and then you have to pay some licensing fee, and now you can't even compete because you don't have enough capital for it to be profitable anymore. And we are back to square one, except that you can't create your own exchange that forces everyone to pay the "tax" because the government has forced upon you the rules they have set. So you couldn't even create an exchange that forces "market maker traders" to pay the tax.

Well that's the nature of political struggles.  Different interests fighting for power.  The main problem with our government is that people don't fight and if they did they wouldn't know what was even in their best interest to fight for.

I'll keep my politics out of your economics if you keep your economics out of my politics.

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niemivh
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July 08, 2011, 06:48:20 PM
 #87

If you'd like to discuss what the proper role of government and what laws are defined and to be used for, I'll post my definitions for review again.

I've spent the last year improving, defining, and refining how everyone could have the maximum amount of freedoms and liberties and the minimum amount of tyranny.

P.S. It wasn't as hard as I thought it would be.

My original post is here:

Men, Women, Agent(s), Person(s), and Life collectively or individually have synonymous equivalent meaning herein. De facto entrusted crucially dependent Life admits safe guardianship or conveyance thereto.
1.   All men are equal in Rights.
  1.1.   All men are intrinsically free, whose expression when manifest, admits autonomy.
  1.2.   Rights exist because man exists (consequent to Life).
  1.3.   Rights are inalienable and inherent, hence discovered not created.
  1.4.   Man commits autonomous choices apart from all other men.
2.   Rights are defined as the Liberty to control, secure and defend one’s Property and Life.
3.   Liberty consists in the freedom to do everything not in violation of other’s Rights.
4.   Rights Violations are unprovoked physical aggressions (UPAs) initiated by man against another, or Breaches of Contract (BOCs), resulting in an incontrovertible diminishment in one’s Rights.
  4.1.   UPAs are non-consenting acts which cause an Object (Property or Life) to undergo a transferred or transformed change to the Object’s original energy state or condition.
  4.2.   Energy transfer to/from an Object or energy transformation of the Object occurs by means of three ways, namely: thermodynamic work, heat transfer, or mass transfer.
  4.3.   Contracts are compulsory promissory agreements involving Property or Life (and specific performances or forbearances therewith) between mutually consenting men.
  4.4.   Misrepresentation of Contract obligations or BOCs resulting in misappropriation of Property or Life, or expenditures related thereto, is subject to Rights Violations.
5.   Property can be anything comprised of physical material matter (PMM).
6.   Property is the exclusive non-simultaneous possession or dominion of discrete PMM.
  6.1.   Unconstrained/non-delimited/uncontrolled PMM (UPMM), UPMM effusions or energy transmissions, are not Property; they are ownerless nonexclusive UPMM or Emissions thereof, until physically made to become otherwise.
  6.2.   A Property’s inertial reference frame, dimensions, Emissions/Emitters, usage and genesis thereof, define and constitute its Property Scope Ambit (PSA).
  6.3.   PSAs that initiate tangible material perturbations which intersect or preclude another’s preexisting or antecedent PSAs may be subject to Rights Violations.
 6.4.   Preexisting antecedent unconstrained Emitters cannot proscribe the receipt of similar, both in magnitude and direction, intersecting Emissions Flux.
  6.5.   Property cannot transform into something extracorporeal, extrinsic or compulsory due to the manipulation or interpretation of its PMM composition.
  6.6.   Absent Contract and Force, Property or Life of one man shall not control, compel or impede Property or Life of another.
  6.7.   Unintentional personal ingress vouchsafes unimpeded passage and egress.
7.   Force is the means –proportionate to the aggression– to obstruct, inhibit or extirpate the Rights of any man who interferes with or imminently threatens the Rights of other men.
  7.1.   Force can only be applied to resolve Rights Violations and is consequently just.
  7.2.   Man, or an Agent to man, must ascertain that a Rights Violation has occurred.
  7.3.   Man is severally liable and accountable for solely his Rights Violations a posteriori.
8.   Justice, viz., lawfulness effectuates disjunctive Rights between men.
9.   That which is neither just nor lawful is Violence and imperils the Rights of man.
10.   Violence causes inequality (unequal in Rights of man) and is forbidden.

How does the banking system work in your system?  What are the reserve requirements?  How about for insurance?  I don't see (and I may have missed) any means of gathering revenue for the government, how are you going to finance your enforcement of law?


I'll keep my politics out of your economics if you keep your economics out of my politics.

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niemivh
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July 08, 2011, 06:50:10 PM
 #88

Oh, and I forgot to mention one thing. The reason why me or anyone else should determine why we have laws and what and for who they should be for, is exactly so we can draw a simple line in the sand. The line in the sand merely determines if some force was unwillingly applied to another persons life or property in a unconsented to way. Nothing more, nothing less.

Discussing what is fair and not fair really is a subjective matter. Even manipulation, though not nice, does not, in and of itself, violate laws. It all depends on what your contract states.

Everything we engage another person in exchange for, is effectively a contract. If that contract, for example, states that you get to trade faster than the next guy, and there are no guarantees or warranties that explicitly state you are provided similar privilege (as per a contract), then you get to live with the fact you may not get your order executed in time.

I know that HFT seems sneaky and underhanded, but if you don't like it, don't engage in that trade system. Make your own. Of course, the second government comes in and creates special privileges, licenses, platforms, and other whatnot laws, then things have changed. Now the manipulation has become plunder. You no longer have a market of freely trading individuals. The manipulation has now become forceful. Now we have a real problem.

This is the problem we should all be trying to put down. Monopolies (of the forceful type) can now arise to put down any competition that would "right the ship" if left to their druthers. Your plucky laws have now come back to bite you. The very thing you felt was unfair, has now become unlawful. It no longer serves to protect life, liberty and property, but does the exact opposite. Your forced solidarity is now shackling what would be a free market.

You might then say that the laws were designed to prevent or reduce fraud. They do no such thing. We already have laws for fraud. They have been around for thousands of years and they aren't that hard to figure out. To wit they must merely show that what you agreed to (transfer of property, performance or any forbearances thereto) was not fulfilled.

Artificially manipulating a market to keep people "honest" only destroys a free market.


I believe a reply I just posted to another person addresses most of what I would have to say in response to you regarding this post.

Please read it.

=]

I'll keep my politics out of your economics if you keep your economics out of my politics.

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niemivh
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July 08, 2011, 06:54:05 PM
 #89

Trading pokemon cards shouldn't constitute a contribution to "society".

Two people exchanging Pokeman cards are maximizing their utility, benefiting from the exchange.  This results in a betterment for society as 2 people gained something at the expense of nobody else.


Everybody is not entitled to benefits from a transaction. 

How you figure?  Can you give me an example of two people involved in a 'transaction' in which one (or more) parties do not benefit?  I think theft would be a good example, but can you think of anything else?


Guy, just ignore him.  He's a kid.  Stick to responding to the legitimate questions and arguments.


I'm interested in knowing whether you realize and/or care that this tax would destroy retailing trading, especially highly leveraged FX trading. 

I hope Atlas the best.  I just hope he can get over his Ayn Rand phase at some point.

Regarding your question, maybe it would be shorter if you explained exactly why you think it would be destroyed and then I'll tell you if I think you're right and if it's worth saving.

Thanks for the post.

I'll keep my politics out of your economics if you keep your economics out of my politics.

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naturallaw
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July 08, 2011, 06:58:48 PM
 #90

Just to show the absurdity of this argument I've created the following mad-libs below.  They are not a perfect comparasion, but I believe they get the point across.

If you don't like a multi-national corporation raping your country then start your own multi-national corporation.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how great your multi-national corporation is.

Those examples are all way too broad to even debate with. What does raping refer to exactly? Strip mining and polluting someone's water? If  a national corporation does this, then this is actually a role for government to protect property rights in my opinion.

If you want to live in a country that it's a global empire then start your own country.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a country that isn't a war all the time is.

There is a very obvious logical fallacy here, and that is that in order to have a global empire in the first place, you must apply force. This same thing applies to those other examples you posted.
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July 08, 2011, 07:06:02 PM
 #91

Trading pokemon cards shouldn't constitute a contribution to "society".

Two people exchanging Pokeman cards are maximizing their utility, benefiting from the exchange.  This results in a betterment for society as 2 people gained something at the expense of nobody else.


Everybody is not entitled to benefits from a transaction. 

How you figure?  Can you give me an example of two people involved in a 'transaction' in which one (or more) parties do not benefit?  I think theft would be a good example, but can you think of anything else?

I think that an apple looks delicious.  I buy it from a vendor.  He benefits.  Turns out the apple is rotten.  The vendor did not know it.  I do not benefit.

Good example.

Well you are knowingly engaging in a transaction with the vendor so that meets one of my earlier criteria.  But did the vendor know that some of the apples were rotten?  If so this is a clear cut case of the vendor being in the wrong as he would know that some person would eventually get a bad apple.  If he didn't, then why shouldn't have he?  It is his business to know the quality of his product, and it is truly in his better long-term interests to refund you to the money.  But this scenario is hardly analogous to all transactions.


I'll keep my politics out of your economics if you keep your economics out of my politics.

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July 08, 2011, 07:28:54 PM
 #92

Guy, just ignore him.  He's a kid.  Stick to responding to the legitimate questions and arguments.

Why do you put so much weight on somebody's age instead of show a willingness to defeat their points? If a kid told you blood was red, would you suddenly assume it wasn't?

I don't know if Atlas is 'a kid' and I don't really care, he makes reasoned points and has a strong understanding of what he's talking about, even if we don't agree on everything.

I'm interested in knowing whether you realize and/or care that this tax would destroy retailing trading, especially highly leveraged FX trading.

This is a legitimate point. The Tobin Tax is a bad idea.

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July 08, 2011, 07:34:06 PM
 #93

Just to show the absurdity of this argument I've created the following mad-libs below.  They are not a perfect comparasion, but I believe they get the point across.

If you don't like a multi-national corporation raping your country then start your own multi-national corporation.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how great your multi-national corporation is.

Those examples are all way too broad to even debate with. What does raping refer to exactly? Strip mining and polluting someone's water? If  a national corporation does this, then this is actually a role for government to protect property rights in my opinion.

If you want to live in a country that it's a global empire then start your own country.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a country that isn't a war all the time is.

There is a very obvious logical fallacy here, and that is that in order to have a global empire in the first place, you must apply force. This same thing applies to those other examples you posted.

If people of good will and upstanding moral character abandon the use of force do you think that people of ill-will will follow suit?  The role of government is a role of force through a system of law.  The abandonment of force means turning over the keys of government to those only of ill-will.  And that's presently the system we have.  Some may like it worded in the old axiom "if force is outlawed only outlaws will use force".

In order to have a global empire in the first place it does require force.  But it also requires force to dismantle it.  Is being a proclaimed pacifist enough while your labor is taxed from you and used to wage wars and sustain a global empire?  Does that make you a pacifist?  Does that make you a non-user of force?

This whole argument of force is such a semantic journey into linguistical never-neverland.  What we should be talking about is what is good and moral and how we determine what is and what isn't.  I promise you it's a more intellectually stimulating argument.  Maybe that's why so many of the classics focused on morality.

These "arguments" (examples using the same template as an earlier user made) are obviously absurd, that was their intent.  Were you also so quick in pointing out the absurdity of the original argument of me making my own exchange?  Is so, I didn't see it.  

In addition I can't just choose not to be subject to what happens on the stock market.  It has a massive influence on all our lives either directly or indirectly. Hence my wish to use "force" to reform it.

[As a correction: the corporation, planet and culture arguments wouldn't necessarily require 'force' as other examples would.]

I'll keep my politics out of your economics if you keep your economics out of my politics.

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July 08, 2011, 07:39:19 PM
 #94

Guy, just ignore him.  He's a kid.  Stick to responding to the legitimate questions and arguments.

Why do you put so much weight on somebody's age instead of show a willingness to defeat their points? If a kid told you blood was red, would you suddenly assume it wasn't?

I don't know if Atlas is 'a kid' and I don't really care, he makes reasoned points and has a strong understanding of what he's talking about, even if we don't agree on everything.

I'm interested in knowing whether you realize and/or care that this tax would destroy retailing trading, especially highly leveraged FX trading.

This is a legitimate point. The Tobin Tax is a bad idea.


I know this wasn't directed at me, but I have no qualms with anyone's age.  All I listen to is the reasoning of one's arguments and the facts they present.  If all of us did the same we'd all be better off.

As for the Tobin tax being a "bad idea" can you explain why?  To me that could mean that you find it inferior to all other forms of taxation.  If so, why do you find it less favorable than sales taxes, income taxes, luxury taxes, tariffs, value-added taxes, estate taxes, etc?

I'll keep my politics out of your economics if you keep your economics out of my politics.

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July 08, 2011, 07:58:49 PM
 #95

If people of good will and upstanding moral character abandon the use of force do you think that people of ill-will will follow suit?  The role of government is a role of force through a system of law.  The abandonment of force means turning over the keys of government to those only of ill-will.  And that's presently the system we have.  Some may like it worded in the old axiom "if force is outlawed only outlaws will use force".

I completely agree. It's not illegal to apply force when force is being forced upon you. It's your right to defend your life, liberty, and property. This is one of the most essential human rights.

UPDATED: What we are debating is when it's okay to use force. If you can't kill someone for no reason, neither can the government.


In order to have a global empire in the first place it does require force.  But it also requires force to dismantle it.  Is being a proclaimed pacifist enough while your labor is taxed from you and used to wage wars and sustain a global empire?  Does that make you a pacifist?  Does that make you a non-user of force?
See what I had to say about this above.

This whole argument of force is such a semantic journey into linguistical never-neverland.  What we should be talking about is what is good and moral and how we determine what is and what isn't.  I promise you it's a more intellectually stimulating argument.  Maybe that's why so many of the classics focused on morality.

Ok, I would be very interested in this. I already think we've been debating this somewhat already.


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July 08, 2011, 08:40:23 PM
 #96

If you think traders that are seeking to make speculative profits would be 'demolished' paying a 1% tax I guess that's your interest to uphold.  Not to make this about me, but just for an example, I pay more than 25% of my income in taxes, a large amount in property taxes and others.  Most people pay sales taxes on everything they buy, but if those who's 'work' consists of buying and selling scrips of paper that represent other peoples work, ideas and productive capacity can't afford to pay a scant 1%, I understand.  It is a 'free market' we are trying to uphold here.  I guess they will pay when they pay that 15% capital gains that they are working so hard to eliminate.  What you say?  Deferred taxation on earnings?  Never heard of it.

That's just it though, it's not a 1% tax.  It's a 1% tax on EVERY trade, that's a 2% tax round trip.  That means I'd be paying $2,000 round trip for each standard lot ($100,000) FX trade.  Think about that for a second... $2,000.  That means I would need a many sigma event of a 200 pip move JUST TO BREAK EVEN. 

And that's just ONE trade.  I average over 100 trades per month, so that's over $200,000 PER MONTH in taxes.  You can't be serious if you think that doesn't totally shut down retail trading. 

In order for anyone to actually trade with that kind of tax, we'd have to have little to no leverage.  So instead of being able to comfortably trade standard lots with a $50,000 account, traders would need more like $2,500,000, and that tax would still be crippling.  That's not money normal people can come up with, so it DOES wipe retail people out of trading, leaving only the mega money (the banks) to trade. 

So now you've got a market with ONLY banks trading and any normal Joes actually in the market are buy and holders... who are now being crushed even easier by the banks because the banks are the only ones moving the market.

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July 08, 2011, 08:47:57 PM
 #97

If you think traders that are seeking to make speculative profits would be 'demolished' paying a 1% tax I guess that's your interest to uphold.  Not to make this about me, but just for an example, I pay more than 25% of my income in taxes, a large amount in property taxes and others.  Most people pay sales taxes on everything they buy, but if those who's 'work' consists of buying and selling scrips of paper that represent other peoples work, ideas and productive capacity can't afford to pay a scant 1%, I understand.  It is a 'free market' we are trying to uphold here.  I guess they will pay when they pay that 15% capital gains that they are working so hard to eliminate.  What you say?  Deferred taxation on earnings?  Never heard of it.

That's just it though, it's not a 1% tax.  It's a 1% tax on EVERY trade, that's a 2% tax round trip.  That means I'd be paying $2,000 round trip for each standard lot ($100,000) FX trade.  Think about that for a second... $2,000.  That means I would need a many sigma event of a 200 pip move JUST TO BREAK EVEN. 

And that's just ONE trade.  I average over 100 trades per month, so that's over $200,000 PER MONTH in taxes.  You can't be serious if you think that doesn't totally shut down retail trading. 

In order for anyone to actually trade with that kind of tax, we'd have to have little to no leverage.  So instead of being able to comfortably trade standard lots with a $50,000 account, traders would need more like $2,500,000, and that tax would still be crippling.  That's not money normal people can come up with, so it DOES wipe retail people out of trading, leaving only the mega money (the banks) to trade. 

So now you've got a market with ONLY banks trading and any normal Joes actually in the market are buy and holders... who are now being crushed even easier by the banks because the banks are the only ones moving the market.

Actually as I understand it, it's a 1% tax on the profit of the trade. So, if I you had $100,000, make a quick swap into Euros and back in dollars, and end up with $100,001. You would pay a tax of $0.01.
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July 08, 2011, 08:50:48 PM
 #98

If you think traders that are seeking to make speculative profits would be 'demolished' paying a 1% tax I guess that's your interest to uphold.  Not to make this about me, but just for an example, I pay more than 25% of my income in taxes, a large amount in property taxes and others.  Most people pay sales taxes on everything they buy, but if those who's 'work' consists of buying and selling scrips of paper that represent other peoples work, ideas and productive capacity can't afford to pay a scant 1%, I understand.  It is a 'free market' we are trying to uphold here.  I guess they will pay when they pay that 15% capital gains that they are working so hard to eliminate.  What you say?  Deferred taxation on earnings?  Never heard of it.

That's just it though, it's not a 1% tax.  It's a 1% tax on EVERY trade, that's a 2% tax round trip.  That means I'd be paying $2,000 round trip for each standard lot ($100,000) FX trade.  Think about that for a second... $2,000.  That means I would need a many sigma event of a 200 pip move JUST TO BREAK EVEN. 

And that's just ONE trade.  I average over 100 trades per month, so that's over $200,000 PER MONTH in taxes.  You can't be serious if you think that doesn't totally shut down retail trading. 

In order for anyone to actually trade with that kind of tax, we'd have to have little to no leverage.  So instead of being able to comfortably trade standard lots with a $50,000 account, traders would need more like $2,500,000, and that tax would still be crippling.  That's not money normal people can come up with, so it DOES wipe retail people out of trading, leaving only the mega money (the banks) to trade. 

So now you've got a market with ONLY banks trading and any normal Joes actually in the market are buy and holders... who are now being crushed even easier by the banks because the banks are the only ones moving the market.

Actually as I understand it, it's a 1% tax on the profit of the trade. So, if I you had $100,000, make a quick swap into Euros and back in dollars, and end up with $100,001. You would pay a tax of $0.01.

I thought we just went through this though?  Reference a few posts up.  Now I'm back to being confused. 

If it's a tax only on the profit, then it does absolutely nothing to stop HFT because 1% isn't shit.  If it's a tax on the underlying value of the trade, then it will totally crush the retail markets.

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July 09, 2011, 12:01:25 AM
 #99

As I understand it, it's a tax on the trade, both ways.
For sure, it'll reduce profits for traders. Basically you'll neep more pips. But you know what ? That the point. It's not complex to understrand that speculation add a premium on the price for the average consumer.
Of course it it important to have some, but we can't have infinite one. We need to put a limit somewhere.

As for the 1%, it's not a fixed one. Different markets could have a differents one, maybe by targetting a max % of speculation transactions within a market.
There as been some work one the value of the %, i think you can find infos on the wiki page

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July 09, 2011, 06:24:20 AM
 #100


The faux 'trump card' that libertarians use frequently is something along the following lines: "if you have to use force to enact anything then it invalidates your justification", and "force" is painted with as large a brush as possible.  I see this argument alluded to and used all over this forum.  For some, I'd say it's actually their prime "philosophical" mantra.  This 'reasoning' is so deeply flawed.  It gives special status to the status quo.  It makes enacting any means of justice impossible.  It reduces any attempt at social cohesion into an absurd exercise in futility.  But it's so easy; it's really more of an escape clause from deeper levels of understanding what justice is.  Things become very simple and cartoonish when you adopt this world view.  You identify problem "A" in the world but you can't do anything about it because that would require use of "force".  Within this ideology, the only thing you can do is to provide "choices" to people.  Understanding sociology and game theory exposes the absurdity of this position, much of what is viewed as 'choice' in a social context is nothing of the sort.  There really is so much I can say on this topic, but I'd rather hear what this forum has to say regarding a defense of this world view as popularized by Ayn Rand in Atlas Shrugged.


Just to show the absurdity of this argument I've created the following mad-libs below.  They are not a perfect comparasion, but I believe they get the point across.

If you don't like a multi-national corporation raping your country then start your own multi-national corporation.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how great your multi-national corporation is.

If you see problems with your culture then start your own culture.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a culture with your values are.

If you want to live in a state with your ideal conditions then start your own state.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a state with your ideal conditions are.

If you want to live in a country that it's a global empire then start your own country.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a country that isn't a war all the time is.

If you want to live on a planet where there is no war, poverty, disease, exploitation, misery and famine then build your own planet.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people see how valuable your planet is.

You can see that this idea makes reform impossible.  Hence its lack of merit.


The larger your vision, the more effort you need to make it a reality. Why is this a surprise?

Status quo bias is a feature of reality. libertarianism acknowledges this, nothing more.

Most statists really overestimate how difficult it is to build a coalition of people who can agree on a complex issue and how to keep the coalition "pure" and corruption free. Libertarians have tried a lot of activism in the US. Libertarianism loses the political test because there are very few people for whom the "what's in it for me?" question is answered.

In my country, India, there are very few people who even agree to libertarian ideas. How long do you think it is going to take for me and the 1000 or so libertarians in India to convince 900 million indian adults?

You are free to consider this overly cynical, but the present libertarian world-view is built after a lot of trials of political activism that have failed, or are humongous projects on their own.

The law is a ham handed tool. It should not be used to make subtle changes in the world. If you start upon this path, there is no end to it.

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