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APT Tax

psionl0 said:
Not if all that is being traded is claims on shares (see simonxlong's post). Like bitcoin, the only things that are public record are wallet to wallet transfers. How tightly your name is bound to a wallet depends on what actions you take to disassociate your name from your wallet.

Note that currently, wallet to wallet transactions are not illegal. It seems that part of making APT work involves cracking down on barter and the trade of IOUs.
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I was just thinking of the simple scenario where I, for example, own some company's stock. That ownership is already registered with the book-entry system and my book-entry account within the electronic trading platform. So even though it's possible for me to anonymously trade those stocks to you in a Ripple network, thus I sell to you a claim on the stock I own for a credit entry in my account in the Ripple network… I'm still the legal owner of the stock and I can sell it to anyone else as I please, hence nullifying your claim to the stock once it's sold via the legal platform to someone else outside the network.

At least I wouldn't be comfortable making a Ripple-purchase for large sums (millions, billions) without gaining legal ownership of and rights to the assets as well.
 
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lupus_in_fabula said:
I was just thinking of the simple scenario where I, for example, own some company's stock. That ownership is already registered with the book-entry system and my book-entry account within the electronic trading platform. So even though it's possible for me to anonymously trade those stocks to you in a Ripple network, thus I sell to you a claim on the stock I own for a credit entry in my account in the Ripple network… I'm still the legal owner of the stock and I can sell it to anyone else as I please, hence nullifying your claim to the stock once it's sold via the legal platform to someone else outside the network.

At least I wouldn't be comfortable making a Ripple-purchase for large sums (millions, billions) without gaining legal ownership of and rights to the assets as well.
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If you are buying stocks to hold for any length of time then you would certainly want to have legal title to those shares. APT wouldn't be an issue in those cases.

But if you intend to sell again in 10 minutes (or you are doing a short) then transferring title would probably be a hindrance (and expensive). There are web sites where you can practise your day trading "skills" without shares changing hands. (eg Plus500) These are little more than glorified gambling sites.

Of course, if you place all your trust in an internet stranger then you deserve what you get.
 
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psionl0 said:
But if you intend to sell again in 10 minutes (or you are doing a short) then transferring title would probably be a hindrance (and expensive). There are web sites where you can practise your day trading "skills" without shares changing hands. (eg Plus500) These are little more than glorified gambling sites.
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Sure, but even with "mirroring sites" or shorting, with sufficient legislation, you wouldn't have title to the profit from buying-owning-selling stocks for a few minutes unless you pay the tax, if nothing else, based on imputed values.

Anyhow, I don't think of the APT tax as a replacement for all other taxes, although I think something of the sort is inherently a good idea – i.e., a tax on a variety of financial transactions making speculation on capital gains less attractive of a business model, and thus lessening such logic's grip of the economy as a whole.

(Btw., I don't think simonxlong's example in #51 avoids taxation.)
 
bam said:
I'm not an IRS agent but I do know the IRS has years of digital records for every entity that's reported taxes. If your grocery store has been doing millions of dollars of business over the last 10 years and suddenly drops it will throw up some red flags. Are they cheating now with 30% rates? Why do you feel so strongly that the incentive to cheat will be so much stronger with a reduced 0.35% rate?
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During the early days of FATCA enforcement, there was a period that would waive the penalties and interest (I think the interest was included). While it was a success, not everyone took advantage of it that could have. It's not about the percentage. Never has been.


Offshore banks won't be enforcing our tax laws but they won't accept your $100 dollar bill for $100, it will only be worth $98 to them because they know they have to pay the 2.5x penalty when they try to use it. The penalty is built in at both ends.
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I refer you back to FATCA. Bringing money back into the US for local use, is already an issue. An issue that the APT purports to correct. The problem is, that there is no need to bring it back into the US for larger corps.

All companies use tricks to reduce their tax bills. The best way to combat that is to reduce loopholes with a tax like the APT tax that has no loopholes.
In your example of an offshore payroll location the money still has to come to the workers sometime right? As soon as it does it starts getting taxed. It gets taxed when it comes in, it gets taxed again when the employees pay their mortgages, buy food, buy gas, pay bills etc. It gets taxed again when the stores they buy from pay their suppliers or service their startup debt. It gets taxed again when it goes to a bank and it gets taxed again when the bank sends it to the fed.
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There is no tax system without loopholes, and the APT has plenty. Look at who is paying the taxes in all of those scenarios. It's not the corp.

Another easy way to stop your offshore payroll scenario? Require all companies with US employees or even doing business in the US to utilize a US based bank or choose from a list of approved foreign banks that have agreed to follow US tax and accounting regulations for accounts doing business in the US.
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Not sure how well that would work in a world of international trade that we live in.
 
lupus_in_fabula said:
Sure, but even with "mirroring sites" or shorting, with sufficient legislation, you wouldn't have title to the profit from buying-owning-selling stocks for a few minutes unless you pay the tax, if nothing else, based on imputed values.
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There is a certain amount of naivety about this response. The Plus500 website works like any other gambling website You deposit money into an account and then you can place all of the bets you like (until your money runs out). If you are making a profit then you can withdraw money from your account. APT only applies to the deposit and the withdrawal but not to the numerous transactions within.

Large organizations like banks can do this on a much larger scale and there is little the government can do to outlaw it (assuming they had the will to do so).
 
psionl0 said:
There is a certain amount of naivety about this response. The Plus500 website works like any other gambling website You deposit money into an account and then you can place all of the bets you like (until your money runs out). If you are making a profit then you can withdraw money from your account. APT only applies to the deposit and the withdrawal but not to the numerous transactions within.

Large organizations like banks can do this on a much larger scale and there is little the government can do to outlaw it (assuming they had the will to do so).
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Perhaps it's naive. But having it at entry and exit points is still something. It seems to me any tax of this kind should at least in principle be modified to target financial corporations rather than casual gamblers.
 
lupus_in_fabula said:
Perhaps it's naive. But having it at entry and exit points is still something. It seems to me any tax of this kind should at least in principle be modified to target financial corporations rather than casual gamblers.
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Targeted by size of trade or number of trades daily somehow?
 
bam said:
Targeted by size of trade or number of trades daily somehow?
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Haven't thought about it that much, but intuitively size seems to be better (any number of transactions can always give us a volume translated into size for a given time interval if so needed).
 
lupus_in_fabula said:
Perhaps it's naive. But having it at entry and exit points is still something. It seems to me any tax of this kind should at least in principle be modified to target financial corporations rather than casual gamblers.
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That is the critical question. Is this "something" enough to replace all income/sales taxes or is a lot of the proposed revenue lost in between the entry and exit points?

A transaction tax may be a useful supplement to other taxes though I'm a little dubious about a tax makes it more preferable to hoard money instead of spend it. Fortunately, the rate is small enough that it shouldn't have an adverse effect on ordinary income and spending.
 
Here's a link to a WP article from today about Trump's proposed tax cuts - https://www.washingtonpost.com/blog...-giveaway-to-the-rich/?utm_term=.c5eea1a3809c

"It is, in fact, a gigantic giveaway to corporations and the wealthy, and polls show the public doesn’t believe corporations and the wealthy desperately need relief from the oppressive burden of taxation."

"The dramatic cut in the corporate tax rate will mostly flow back to wealthy shareholders — and because we perversely tax investment income at a lower rate than wage income, they’ll pay low tax rates on all that new income. The bill will also eliminate the Alternative Minimum Tax, which is in place to ensure that wealthy people can’t use loopholes to avoid paying any tax at all."
 
401K's - "Taxpayers now can channel $18,000 of income tax-free into 401(k)s. Republican tax writers initially proposed lowering that cap to $2,400 and, after pushback, that number has been in flux."

Mortgage interest deduction - "Americans can now deduct mortgage interest from their incomes if they itemize deductions. The plan does not call for changing that directly but it does call for doubling the standard deduction, a separate tax return line that determines eligibility for itemizing. Doubling that would mean fewer Americans itemizing - and fewer deducting mortgage interest."

Elimination of the SALT deduction - "A proposal to eliminate a popular tax deduction for state and local tax (SALT) payments has threatened to derail the Republican plan. Democratic and Republican lawmakers from high-tax states, such as New York, California and New Jersey, oppose this change because it would hit their constituents hardest."

Fiscal Responsibility? - "The Trump tax-cut plan would reduce federal tax revenues by $2.4 trillion in the first 10 years and by $3.4 trillion in the 10 years after that, adding greatly to the deficit and the debt, according to the Tax Policy Center, a non-partisan think tank."
 
bam said:
Fiscal Responsibility? - "The Trump tax-cut plan would reduce federal tax revenues by $2.4 trillion in the first 10 years and by $3.4 trillion in the 10 years after that, adding greatly to the deficit and the debt, according to the Tax Policy Center, a non-partisan think tank."
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Republicans think that it is worth the risk if it makes the top 1% richer. And Trump won't be POTUS when the **** hits the fan.
 
bam said:
Mortgage interest deduction - "Americans can now deduct mortgage interest from their incomes if they itemize deductions. The plan does not call for changing that directly but it does call for doubling the standard deduction, a separate tax return line that determines eligibility for itemizing. Doubling that would mean fewer Americans itemizing - and fewer deducting mortgage interest."
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This is one of the most questionable objections to the proposed tax code out there. The only reason you wouldn't itemize is because the standard deduction is greater than the itemized amount. To "take away" itemization because you are taxing even less income, is not much of a take away. It't not only better since you are taxing less, it simplifies the tax process removing additional checks and verification.
 
psionl0 said:
Republicans think that it is worth the risk if it makes the top 1% richer. And Trump won't be POTUS when the **** hits the fan.
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I'm not disagreeing, I just don't understand the mindset. Why doom the next generation with crushing debt? It's not a viable long-term solution, it's simply political bs that has no real meaning. It won't benefit most who voted for Trump and it's unlikely to benefit the Repubs who are pushing it either.
 
Some comments from David Kelly, chief global strategist at JPMorgan Funds about the proposed tax reform currently in congress. Doesn't look like a great deal of thought is being put into this by the President. His immigration reform and tax reform are at odds with each other. https://www.marketwatch.com/story/w...in-too-much-from-proposed-tax-cuts-2017-11-06

“Given Friday’s employment report showing the unemployment rate at its lowest level in nearly 17 years and just 0.5% year-over-year growth in the labor force, it will be very hard for the economy to sustain stronger growth for more than a few quarters, barring immigration reform designed to increase (rather than reduce) legal immigration,” Kelly said.

“When you already have a big budget deficit in a full employment economy, it is a very bad idea to use deficit spending to finance a tax cut,” he added.

What’s more, such fiscal stimulus would lead to tighter monetary policy and higher interest rates.

According to so-called dot plot, or where the policy makers expect the Fed funds rates, the central bank expects to raise rates three times in 2018.

“However, if the economy is consistently growing faster than its capacity in the first half of 2018, partly due to a tax cut, the Fed may feel that four rate hikes in 2018 would be more appropriate. Either way, deficit-financed tax cuts should be a recipe for higher interest rates,” said Kelly.
 
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