Daytrader999 

That's VERY moderate compared to the transaction tax which is (planned) to be imposed on any derivatives in Germany starting from 2021.... I'd immediately subscribe to this.

Does the planned German transaction tax apply to you if you are a German citizen trading on a US exchange like the CME?

ReximusMaximus 

If it were up to me, I'd assume that taxing gains would make more sense, in particular perhaps a change to section 1256 would be more reasonable. If the FTT goes too high, their forecasted tax revenue had better account for a severe drop off in trading volumes. At least reform to 1256 would not hinder participation/liquidity etc.

Can't quote source but I believe that one of Biden's suggestion is to make all capital gains taxed as income. The elimination of a lower taxed Long Term Capital Gains rate would eliminate Section 1256 (assuming you mean the 60/40 rule).

ReximusMaximus 

Does the planned German transaction tax apply to you if you are a German citizen trading on a US exchange like the CME?

Yes, the tax applies independent of the location of the transaction or exchange, it will apply to all transactions as long as you're mainly located in Germany (means as long as you have to pay taxes in Germany).

It's quite complicated and probably against constitutional law, but apparently they plan to impose it first and deal with the lawsuits later....

SMCJB 

Can't quote source but I believe that one of Biden's suggestion is to make all capital gains taxed as income. The elimination of a lower taxed Long Term Capital Gains rate would eliminate Section 1256 (assuming you mean the 60/40 rule).

Yes I was referring to the 60/40 rule.

I would hope that if a measure like eliminating LTGC were to go through that the FTT would either be minimal or preferably nonexistent.

I totally accept the reality of paying the taxman, but have a hard time swallowing the elimination of short term trading through onerous FTT rates. The rate Harris has suggested wouldn't destroy trading, but there are others out there that want rates that would. I can't imagine doing anything other than trading for a living, just can't even picture it.

SMCJB 

@ES at 3372 would be $6.74 (hence $0.67 on MES) @CL at 42.60 would be $0.85 @GC at 1940 would be $3.88 @GE at any price would be $20 @BTC at 11650 would be $1.16

ReximusMaximus 

Yes I was referring to the 60/40 rule. I would hope that if a measure like eliminating LTGC were to go through that the FTT would either be minimal or preferably nonexistent. I totally accept the reality of paying the taxman, but have a hard time swallowing the elimination of short term trading through onerous FTT rates. The rate Harris has suggested wouldn't destroy trading, but there are others out there that want rates that would. I can't imagine doing anything other than trading for a living, just can't even picture it.

I agree definitely not as bad as some proposals. I've always assumed that there would be exemptions. $13.48 per round turn tax on ES would really hurt market makers (and HFT) and would probably mean less liquidity on the inside market. $1.70 in CL is still small. $40 RT on GE/Eurodollars is more than a tick!

SMCJB 

I agree definitely not as bad as some proposals. I've always assumed that there would be exemptions. $13.48 per round turn tax on ES would really hurt market makers (and HFT) and would probably mean less liquidity on the inside market. $1.70 in CL is still small. $40 RT on GE/Eurodollars is more than a tick!

But every high volume participant would likely end up classified as a market maker.

imo ftt is a non starter for trading in the states (at basically any level). I imagine most exchanges have a plan to take trading offshore. ICE setup the Singapore mini energy contracts in preparation for an EU ftt, i'd imagine every exchange has a similar plan in place. It will definitely be a headache, but not overly concerned with it taking away my livelihood.

addchild 

But every high volume participant would likely end up classified as a market maker.

Agreed so almost everybody they are really targeting would be exempt and it would just become a tax on retail traders. Which in my opinion would completely defeat the point of the tax.

addchild 

I imagine most exchanges have a plan to take trading offshore. ICE setup the Singapore mini energy contracts in preparation for an EU ftt, i'd imagine every exchange has a similar plan in place.

Wouldn't ICE (old IPE and LIFFE) be considered UK and not Europe now? Haven't had these conversations recently several years back when I was having this conversation with a senior exchange member, they said that they believed all the exchanges had plans to move trading to Switzerland in the event of a European wide FTT.

addchild 

But every high volume participant would likely end up classified as a market maker. imo ftt is a non starter for trading in the states (at basically any level). I imagine most exchanges have a plan to take trading offshore. ICE setup the Singapore mini energy contracts in preparation for an EU ftt, i'd imagine every exchange has a similar plan in place. It will definitely be a headache, but not overly concerned with it taking away my livelihood.

While relocating offshore might help the exchanges to avoid FTT, wouldn't domestic US traders still be subject to the taxation as citizens and residents? I'm sure it's impossible to say just yet but I can't imagine Uncle Sam letting that coin go.

I've been watching those political talking heads discuss financial transaction tax in the EU for over 10 years. They need the money to finance their ever growing non productive bureaucratic government. They will take the money from everywhere they can like big companies via taxes and under the name of regulations. They will suck out the last penny of the people via taxes to support their extraneous expense pattern while growing insurmountable debts also to be paid by the plebs. Until revolution sets in like seen in ancient times.

I stopped paying attention to it years ago as it is out of my control (even voting doesn't help). When it comes it comes and I will see what will be the best thing to do at that time. Before that no need to worry or speculate I would say. Ehh, I mean yes speculate, on the markets but not on politics as they are unreliable and even more unpredictable than let's say the ES, GC or CL for that matter

ReximusMaximus 

While relocating offshore might help the exchanges to avoid FTT, wouldn't domestic US traders still be subject to the taxation as citizens and residents? I'm sure it's impossible to say just yet but I can't imagine Uncle Sam letting that coin go.

Its hard to guess about something that doesn't exist at all right now, but exchanges wouldn't be moving offshore to save themselves a ftt, they would do it to save their customers a ftt, and in turn, their business.

Again its only speculation but I'd imagine traders who are effected would likely end up being the sole US employee of a shell company in whatever tax preferential country the exchanges land in. So the government would get theirs, but it would just be taxes on income.