Why the Federal Budget can NEVER BE BALANCED

I'm not talking about Options and Futures derivative transactions. I'm talking about non reportable Over The Counter derivative contracts that were illegal from 1936 - 1982. Credit Default Swaps, Structured Investment Vehicles and Synthetic Collateralized Debt Obligations. These private contracts are not taxed and the banks are not required to report them on their balance sheets. 1.5 quadrillion worth of derivatives. A 1% Tobin Tax. Also illegal Wash Trades. Where through High Frequency Trading contracts are bought and sold simultaneously. If the Credit Default Swaps are not banned in the future they will destroy the US T Bonds. Originally Posted by SEE3772

I agree with you that CDSs and various other types of structured vehicles continue to pose serious systemic risks to the financial system, and have long argued that the crafters of Dodd-Frank should have paid more attention to this issue instead of cranking out 2,300 pages of arcane, virtually worthless legalese that fails to effectively address the most critical issues.

But my point was essentially that a "Tobin tax", or any similar transactions tax levied at sufficient rates as to collect aggregate revenues greater than a fraction of one percent of GDP, would simply cause affected trading activity to dry up or move elsewhere. Disincentivization of most of that type of activity would, in my opinion, not be a bad thing. (In fact, I think it would in many respects be an unambiguously good thing!)

It's just that it's a fantasy to believe that you could make much of a dent in the deficit by imposing this type of tax.

Dilbert, please read up on the FairTax. How could politicians ever play with the prebate the way they play with the income tax? It's not possible. Originally Posted by CuteOldGuy

all they have to do is play off the percentages of the prebate, how high or low it will be. btw, this fair tax idea was written by a congressman who iis/was an insider of washington politics.

other problem I have with it is that you need to keep the receipts in order to get the prebates.

Where in the hell are you getting your information? Keep the receipts? Bullshit. The same prebate goes to everyone. It's designed to cover any tax paid on items up to the poverty level. That way, no one at the poverty level or below pays any tax.

Dilbert, you really need to read up on this. The FairTax was written by a team, and vetted by hundred of economists. Do you really think the income tax is better or more fair than the FairTax? You have your facts all wrong You need to learn what it really is.

www.fairtax.org

i read the book

There is nothing in the book about keeping receipts. Or that the law was written by an insider for the benefit of insiders. Which book did you read?

Here's an explanation of the prebate:

http://www.fairtax.org/PDF/PrebateExplained2012.pdf