Mike Bellafiore Interview on the Trader Tax Bill

I just read an excellent interview with SMB Capital partner Mike Bellafiore entitled “The Transaction Tax Will Destroy Small Businesses,” conducted by Damien Hoffman of Wall Street Cheat Sheet and I wanted to call your attention to this important interview.

Mike pulls no punches in explaining how detrimental this “small” tax would be on most if not all retail traders:

“The transaction tax would put a lot of small businesses out of business. There are a lot of very hard working middle-class Americans making a living running small businesses.

They trade stocks, options, and other financial instruments.

Clearly, increasing the cost of a round trip trade of ten thousand dollars by fifty bucks is not negligible. Margins are often quite thin in this business, so any new taxes would lead to bankruptcies.”

Mike further states:

“Overall, this is just a punishment for short-term professional traders who had nothing to do with the securitization of questionable mortgages.”

Asked what would be the result or impact to the broader market:

“If this were to pass, there would certainly be a flow of capital out of the United States. They tried this in Sweden. They enacted a tax on all stock and bond trading. The tax drove financial business out of Sweden. So, the tax was repealed after a few years. Stock exchanges around the world are robust. The trading will go elsewhere.”

Take the time to read the whole interview – it’s brief but packed with powerful information that should spur all retail traders to write their Representatives and Senators to oppose this legislation.

You can find more information on the proposed legislation, and sign a petition from the Securities Traders Association ‘trader tax bill’ page.  The proposed legislation is HR 4191.

Traders, take the time to learn what you can about this bill and stand up to oppose it.

Corey Rosenbloom, CMT