European Financial-Transaction Tax: âLoch Ness Monsterâ Likely Disappearing Again: WSJ
http://blogs.wsj.com/economics/2012...-loch-ness-monster-likely-disappearing-again/
Think I noticed this link on the thread earlier, itâs a good article. I just added this Comment, #2.
FTT is really a Socialist Tax. Sarkozy and Merkel are both center-right politicians fighting off Socialist opposition in their upcoming re-elections. To close the poll gap, as they are behind, they are both talking up FTT to appease bank-basher independent voters, and win over some of the Socialist vote too. FTT should be relabeled the Socialist Tax, as itâs not a Wall Street Tax, with banks evading it and retail investors, hedgers and pensioners paying it. Itâs also not a Robin Hood Tax, as it steals from Main Street investors to line the pockets of big-spenders in government â in other words socialists.
Merkel is very wrong; a FTT wonât âtame financial markets.â Rather, FTT will drop as an exploding extra-territorial-reach-tax bomb on London - Chicago, New York City, and other money-centers â that will cause great havoc, and tip Europe into severe-structural recession. Why promote and advertise raising taxes like FTT, as Europe enters another recession, and while the EU and euro zone struggle to survive?
Merkel is also wrong to project FTT tax revenues for anemic government budgets. Europe will lose tax revenues, as financial-service industries and jobs flea to non-FTT tax centers like London, New York, Geneva and Asia. FTT revenues will be a tiny fraction of projections, while income and capital gains taxes - the tax already on financial transactions âdrop off drastically.
Monti is right about Tobin. His FTT concoction sounded good on a napkin, but he later realized it would be a disaster in practice, so Tobin abandoned his own idea. Itâs Freakonomics 101, governments interfere with free markets trying to control them, and their disincentives cause the opposite effect from what they hoped.
Speculators and hedge funds are good. In case anyone hasnât noticed, hedge funds are the ones speculating on purchasing PIIGS and French debt the past few weeks. Speculators buy when governments and banks want to sell, so donât put them out of business overnight with FTT. If that isnât socially useful, then explain to me how drinking $200 French wine, eating expensive cheese and wearing luxury apparel are more socially useful than speculators helping to save Europe.
http://blogs.wsj.com/economics/2012...-loch-ness-monster-likely-disappearing-again/
Think I noticed this link on the thread earlier, itâs a good article. I just added this Comment, #2.
FTT is really a Socialist Tax. Sarkozy and Merkel are both center-right politicians fighting off Socialist opposition in their upcoming re-elections. To close the poll gap, as they are behind, they are both talking up FTT to appease bank-basher independent voters, and win over some of the Socialist vote too. FTT should be relabeled the Socialist Tax, as itâs not a Wall Street Tax, with banks evading it and retail investors, hedgers and pensioners paying it. Itâs also not a Robin Hood Tax, as it steals from Main Street investors to line the pockets of big-spenders in government â in other words socialists.
Merkel is very wrong; a FTT wonât âtame financial markets.â Rather, FTT will drop as an exploding extra-territorial-reach-tax bomb on London - Chicago, New York City, and other money-centers â that will cause great havoc, and tip Europe into severe-structural recession. Why promote and advertise raising taxes like FTT, as Europe enters another recession, and while the EU and euro zone struggle to survive?
Merkel is also wrong to project FTT tax revenues for anemic government budgets. Europe will lose tax revenues, as financial-service industries and jobs flea to non-FTT tax centers like London, New York, Geneva and Asia. FTT revenues will be a tiny fraction of projections, while income and capital gains taxes - the tax already on financial transactions âdrop off drastically.
Monti is right about Tobin. His FTT concoction sounded good on a napkin, but he later realized it would be a disaster in practice, so Tobin abandoned his own idea. Itâs Freakonomics 101, governments interfere with free markets trying to control them, and their disincentives cause the opposite effect from what they hoped.
Speculators and hedge funds are good. In case anyone hasnât noticed, hedge funds are the ones speculating on purchasing PIIGS and French debt the past few weeks. Speculators buy when governments and banks want to sell, so donât put them out of business overnight with FTT. If that isnât socially useful, then explain to me how drinking $200 French wine, eating expensive cheese and wearing luxury apparel are more socially useful than speculators helping to save Europe.
