The proposed financial transaction tax is generating a heated debate among traders, especially retail investors who fear it will push them out of the market by eroding the often-thin margins they make on their trades.
Much of the heat is being directed at Jim Cramer, who voiced his reluctant support if the tax revenue is used to create jobs in America.
In his response to those who disagree with his position, Cramer provided the following commentary today on RealMoney:
"To those who now despise me for saying that I could live with a transfer tax, understand, I do not want one. I do not favor higher taxes. Taxing trading would be bad for business.As part of TheStreet's mission to provide a variety of perspectives on topics important to the trading community, we are also including the following sampling of the emails and comments received about the transaction tax and invite our readers to post additional comments.
But I am a believer that if we do not create jobs in this country we will fall horribly behind all others in the world. I think we will be doomed to permanently low growth, if no growth at all. I believe that it is incumbent upon everyone to sacrifice at this time.I repeat, I am not so stupid as to want taxes to cut into profits. However, for those who are not willing to sacrifice in order to create employment in this country, I say to you that you do not recognize what goes wrong if we don't get employment going in this country. For those of you who say that I stabbed you in the back by saying that I could live with this tax, let me remind you of something: I can live with any tax IF it helps create jobs.
Most traders would feel a huge impact from even a tiny tax on trades, so it would increase volatility in the markets by reducing participation by traders. Increasing the capital gains tax, on the other hand, would have only a small effect, because stocks held for the long term don't get turned over frequently -- and if held until death, get their basis stepped up so there's no capital gains tax.
Jim - You have a lot of bashers especially when your calls go bad. I believe you TRY to do your best in providing analysis. As such, I don't place any blame on you since it is up to us to follow it. BUT your position on Transaction Tax is absolutely WRONG. Taking away small profit margins will negatively affect the majority of retail investors. You need to explain to your TV and RM audience why you are a proponent of such an idiotic idea.
If it goes thru it makes the USD stronger so I am totally for it.....makes sense too cuz the tax should be focused not on the small retail investor but all those QUANT FUNDS and FLASH TRADERS that have blew all of us one time or another out of a trade.....so JIM you may want to caveat that concept for Tax Specific Language to protect the small fish but go after the Big Ones...with Europe doing the same thing we could actually pick up some $$ to pay back the Chinese....ouch
People in this country are furious with Wall Street, this tax has a better chance of passing than most people realize. If it were named it the Goldman Sachs Tax. It would then sail through congress.
Jim -- enough is enough with this spending and taxes We elected a boy to be president who never held a job...What jobs did 760 billion dollars create??????