Warren Buffett Backs a Transaction Tax

http://www.futureofcapitalism.com/2009/12/warren-buffett-backs-a-transaction-tax

Warren Buffett supports a proposal by Democrats in Congress that "would apply a tax of 0.25 percent or 25 basis points to stock transactions in excess of $100,000, and a levy of 0.02 percent or 2 basis points on derivatives including futures, options, swaps and credit default swaps," Bloomberg reports (link via TaxProf). Since the tax applies to transactions in stock or derivatives, but not government bonds, it will just make it easier for governments to issue bonds to borrow money to spend on subsidizing Mr. Buffett's railroads and windfarms. Government bonds are already tax advantaged through their tax-free interest; this transaction tax would make them even more tax-advantaged than they already are. Bloomberg also notes high in its story that Vanguard mutual fund group founder John Bogle supports the tax, while waiting till lower down in the article to report that the tax will be refunded for mutual funds. Backing the bill in the Senate are Tom Harkin of Iowa and Bernie Sanders of Vermont. Neither Iowa nor Vermont are exactly what you'd call financial centers.

by Editor  |  Dec 4, 2009 at 11:03 am Related Topics:  Capital Markets Regulation, Energy, Taxes, Warren Buffett receive the latest by email: subscribe to the free futureofcapitalism.com mailing list