Quote from Robert A. Green:EU-wide tax
But why FTT? I wish those predictions of yours were a bit more... green
I mean how about the carbon tax option? So Lewandowski is the new recruit in the Tobin Tax International fight for social justice? Haven't those guys forgotten that the UK taxpayer has just made more billions on their well-timed (albeit unintentional) dip buying of bank shares than the entire UK Stamp Duty collected from U.S. investors over two years?
And Lewandowski truly knows whereof he speaks! That man's financial industry experience consists of converting a couple of state-owned companies to exchange-listed ones (which he did so well that he even got prosecuted by the public prosecutor for allegedly acting against state interest during his privatization of two Cracow-based companies), where 'the' stock exchange is smaller than the CSCO stock, where one futures contract and one [illiquid] ETF are listed, exchange membership fees are higher than U.S. retail commissions, and there is virtually no competition among market makers or brokers, resulting in such flops as the recent delisting of all equity options. And he says that:
"..it would be easiest to convince the public to the financial transactions tax [i.e. to 'tax that man behind the tree'... and he is an unelected civil servant precisely to be freed from such populist short-termist vote-winning decisions - so he does not even understand properly his purpose of being there ]"
But let's delve deeper into his assessment of the chances of this happening. "The Commissioner however admitted, that the road leading to the introduction of such a tax would be long. It is clearly apparent that Berlin and Paris would want it, but talks about the financial tax have not lead to an agreement - he said. Moreover, every time when a new source of financing appears in sight, state finance ministers want to sieze it for their own budgets. There are also objections whether an European[-only] FTT tax would make sense unless the U.S. also agreed to introduce such a tax. Questions emerge about its impact on the financial sector and the possible relocation of financial institutions to other centers." [source: Lewandowski mulls an EU-wide tax, Polish Press Agency, PAP, for the wp.pl portal, URL:
http://finanse.wp.pl/kat,12812,title,Lewandowski-rozwaza-podatek-unijny,wid,12554616,wiadomosc.html]
Where are the above objections in the Reuters coverage? Instead they preferred to cast him as the bad guy, firmly pro-FTT, even at the cost of factual correctness, as in this well-chosen sentence they quoted:
"A transaction tax can bring in a big amount of money," he said. "The others will only contribute a smaller part to the 140 billion euros a year we are spending." ...which is simply not true, because even pro-FFT tax researchers such as Schmidt claim exactly the opposite - admitting the FTT (originally designed for volume throttling and not suitable for revenue raising unless its rates are drastically reduced) will be the worst option in terms of the revenue-raising potential:
Schmidt (2007) finds that that a CTT rate of 0.00005 would be nearly volume-neutral, reducing foreign exchange transaction volumes by "only" 14%. However, such volume-neutral Tobin tax would raise relatively little revenue, estimated at around $33 bn annually, i.e. an order of magnitude less than the "carbon tax [which] has by far the greatest revenue-raising potential, estimated at $130-750 bn anually". Notice that 'their' own most competent researcher did not recommend the FTT option at all! [see:
http://www.elitetrader.com/vb/showthread.php?s=&postid=2753169&highlight=Schmidt#post2753169 ]
