Breaking News: Financial Reform Bills New Hidden Tax For All Stock Trades

Debate in Congress was opened today on the next big reform project: Financial Reform. What's yet to be figured out is exactly what is going to be in it. One thing is for sure, you can bet that when they say "consumer protection" in any context it means that's where the average American gets screwed. Stock Market Investing Today has been in touch with a source in Senator Dodd's office that confirmed that very fact today that would tax all stock trades. The source wanted to remain anonymous as she was not authorized to discuss the bill publicly. According to our source, the big break through was the concept of a hidden tax to replace the proposed VAT that is being floated around. The VAT tax as you know is basically a sales tax on all goods. Polls indicate that most people are against this national sales tax. But, many experts agree that such a tax is key to paying for health care reform and the Wall Street bailouts. We already know that we can't tax Wall Street because that will obviously hurt the economy. The next logical step is to get it from us, the people, but the question is how?

Our source tells us that buried on page 235, paragraph 2 is the answer. A little known provision that allows a surcharge on all transactions conducted daily through credit cards purchases, ATM withdrawals PLUS all investment trades. Similar to the line item that you see on your phone bill for surcharges for services like 911, this surcharge called VST will fund the massive government spending taking place right now and will be at a rate of 2.8%.

What this means is that in addition to all purchases being taxed, all stock trades will now incur the VST surcharge in addition to the commission you pay on every trade you make. Plus, this is not a flat fee, it is 2.8% if the total dollar value of the stock purchase.

The acronym VST actually stands for "Value Subtracted Tax" which is surprising because it is actually named for what it does. A stark contrast to the "Value Added Tax" which doesn't add value it only adds cost.

Such a realistic naming of a fee we have to pay would be equally surprising if it were true -- because it's not. But, the format of the story follows real journalism in this country which is to report rumor and not fact. Why check facts? Let's just report what sounds outrageous. For good measure, always quote the New York Times, a paper which no one I know ever reads. Most people I know read the USAToday. It also helps if you bring out an average everyday American as your news show's expert. You know the one. The guy who's worried about being taxed on money he doesn't even have. Oh, and the girl who just recently got into paying attention to politics as your health insurance expert. Always a good one.

You'll notice that most stories in the news, whether related to the stock market or not, always refer to these unnamed sources and no one in the media bothers to read the bills put forth in Congress to see if what is said is actually true. But, break a story about Tiger Woods, and the media will scour the world looking for mistresses. Read? I think not.

So goes the world of investing and the financial industry and why I wouldn't expect a lot from financial reform. Oh and the screaming and hollering you hear, is probably funded by those who have the money. Who is that? The corporations, that's who. You can bet that any thing they don't want passed will suddenly show unprecedented grass roots opposition. That's probably your sign that it actually benefits people instead of business.

Once again, learn to do your own research, not just in normal news. Do what they do and not what they say and start learning stock market investing on your own as well.