My understanding is that banks lend money over night from the interbank market to balance there books - The interest rate is 0.5% per annum.
A transaction tax of 0.05% added on top of this per night is going to make lending in this market a lot more expensive and the cost will have to be handed directly to mortgage holders and those who received loans of any type. That"s going to be a substantial amount per year.
Also I don"t see how they could ever pass this with wall street and institutions being exempt, one of the main behavioural programming codes- oops I mean one of the main motivations behind this that was an original idea of the people in support is "making wall street pay"...they cant go from making wall street pay to making every one but wall street pay.
Some people think this will give an edge to the banks, removing small firms and trading "competition" from the market but this is not a retail industry fighting for a customer base I don"t see how that would be so. Shares are not plants they don"t grow they need masses of people to be in demand for them and to pump them up, yes the banks have the buying power to replicate that but then no one to sell to...
June 27 (Bloomberg) -- European Union regulators may propose a levy on financial transactions under the EU budget beginning in 2014 to diversify sources of revenue.
"It's one of the options," David Boublil, tax spokesman of the European Commission, the 27-nation EU's regulatory arm in Brussels, said today by telephone. "It's not decided yet."
The commission intends this week to propose the EU's spending program for the seven years starting in 2014. National governments finance 70 percent of the EU budget, leading the commission to seek ways of diversifying sources of revenue.
The spending ceiling for the EU in 2007-2013 totals 864 billion euros ($1.2 trillion), or around 1 percent of the region's gross domestic product.
Any proposal for a financial-transaction tax in the 2014- 2020 budget would need the unanimous support of EU governments, Boublil said. Such a levy is sometimes called a Tobin tax after James Tobin, the Nobel Prize-winning economist who first suggested the idea in 1971.
Read more:
http://www.sfgate.com/cgi-bin/artic...-36J42K1VAA091B053M3MU3M8L4.DTL#ixzz1QfWo2M88
EU Looks to Financial-Sector Tax
BRUSSELSâThe European Commission is set to propose a Europe-wide tax on the financial sector this week as Brussels seeks to boost the revenues it can lay direct claim to as part of a multiyear European Union budget plan.
The Commission is expected to name the financial sector duty as one of two or three taxes it will propose to raise the EU's so-called own resources ârevenue earmarked directly for the EU budget, according to people familiar with the matter.
However the EU's executive arm must tread carefully if it hopes to see the proposal adopted. With member states wielding veto powers on most tax issues, the EU executive must find a way around the longstanding opposition of several governments to the plan.
On Wednesday, the European Commission begins its deliberations on its 2014-20 budget proposal. An announcement is expected Wednesday afternoon or Thursday morning. The proposals will kick off what is expected to be 18 months of grueling negotiations between member states, the European parliament and the EU executive.
Last week European Commission President Jose Manuel Barroso confirmed he will make a proposal on a financial sector tax after the summer.
http://online.wsj.com/article/SB10001424052702304447804576413960092611804.html?mod=googlenews_wsj
The wording is less direct, less aggressive, less " i have the right and you"l do as I say" I sense no foaming at the mouth financial illiterate self righteous we know best screams within those articles.
And so what if Americans backing that women for IMF head - can she force a single country in the world to implement such a tax? Can she turn the hole organization around just because she is in favour?
