1/4% Tax on all stock trades pushed in NY Times today

[loufah]

From http://www.nytimes.com/2011/09/29/opinion/to-ease-the-crisis-tax-financial-transactions.html :

Indeed, a tax of just 0.05 percent levied on each stock, bond, derivative or currency transaction would be aimed at financial institutions’ casino-style trading, which helped precipitate the economic crisis. Because these markets are so vast, the tax could raise hundreds of billions of dollars a year globally for cash-strapped governments and could increase development aid.

Fears about the feasibility of an F.T.T. are overblown. Indeed, more than 40 such taxes have already been put in place around the globe. Britain, for example, has a very successful F.T.T. on shares — known as the stamp duty — which raises more than $6 billion a year and has not had a significant impact on the competitiveness of London’s finance sector. Other countries could likewise institute this tax without harming major financial firms.

If more countries introduce F.T.T.’s, it is essential that the tax be used not only to plug holes in European budgets. A financial crisis that began in the trading rooms of New York and London has pushed farmers in Nepal below the poverty line and cost young girls in Zambia their schooling. The problem is global, and our response must be global, too.

 

[euclid]

Quote from loufah:

From http://www.nytimes.com/2011/09/29/opinion/to-ease-the-crisis-tax-financial-transactions.html :

Indeed, a tax of just 0.05 percent levied on each stock, bond, derivative or currency transaction would be aimed at financial institutions’ casino-style trading, which helped precipitate the economic crisis. Because these markets are so vast, the tax could raise hundreds of billions of dollars a year globally for cash-strapped governments and could increase development aid.

Fears about the feasibility of an F.T.T. are overblown. Indeed, more than 40 such taxes have already been put in place around the globe. Britain, for example, has a very successful F.T.T. on shares — known as the stamp duty — which raises more than $6 billion a year and has not had a significant impact on the competitiveness of London’s finance sector. Other countries could likewise institute this tax without harming major financial firms.

If more countries introduce F.T.T.’s, it is essential that the tax be used not only to plug holes in European budgets. A financial crisis that began in the trading rooms of New York and London has pushed farmers in Nepal below the poverty line and cost young girls in Zambia their schooling. The problem is global, and our response must be global, too.

"Philippe Douste-Blazy, the French foreign minister from 2005 to 2007, is the chairman of Unitaid and a special adviser to the United Nations secretary general on innovative financing."

Another damn politician with no idea about finance and economics. It's frightening that this sort of person can get into a position of influence.

 

[Explorer]

"Innovative financing" is leftie-speak for new taxes, which are sought relentlessly to enhance "social justice" (leftie-speak for wealth redistribution).

Socialists are always on the look-out for new taxes as socialism can't work without suckers to pay for it.

 

[tomdavis]

The article is so full of holes it's hard to know where to begin:

1. The author talks about the support the financial transactions tax (FTT) has in Europe from countries like Portugal, Spain and Belgium (countries with small financial markets and nothing to tax); yet neglects to mention that the UK, Sweden, Ireland, the Netherlands, Malta, and even the Czech Republic and Bulgaria have come out against it. The Swedish and Dutch Finance ministers have both publicly stated that the proposed EU FTT would increase the cost of capital, drive billions in investment capital out of Europe and increase EU unemployment.

2. The author mentions the success of the UK stamp tax, but fails to disclose that over 70% of all London Exchange transactions are exempt and 100% of all other transactions (e.g., trades on the CME or NYSE) are exempt. Of all the transactions that originate in the UK, fewer than 5% are subject to the tax. If all transactions were taxable, financial firms would exit in droves. ICAP (over 2000 employees in London) has already said that they will leave and scores of others will follow right on their heels. In addition, the author fails to mention that Brazil recently repealed most of its transactions taxes and an effort to reinstate them was defeated by an overwhelming 75% vote in their congress.

3. The author talks about all the tax money the FTT could raise, but fails to disclose the GDP damage (an subsequent job losses) the FTT would cause. The EU's own report states that the FTT will result in a decrease in GDP. This should come as no surprise. The Swedish FTT only raised about 3% of the projected revenues and was a massive net loss to the national treasury as the financial industry fled the country leading to job losses and huge decreases in income tax and capital gains taxes that would have otherwise been paid. That's why they declared it a failure and repealed it.

I could go on, but there's no point trying to argue with someone who intentionally fails to disclose 80% of the relevant facts.

Quote from loufah:

From http://www.nytimes.com/2011/09/29/opinion/to-ease-the-crisis-tax-financial-transactions.html :

Indeed, a tax of just 0.05 percent levied on each stock, bond, derivative or currency transaction would be aimed at financial institutions’ casino-style trading, which helped precipitate the economic crisis. Because these markets are so vast, the tax could raise hundreds of billions of dollars a year globally for cash-strapped governments and could increase development aid.

Fears about the feasibility of an F.T.T. are overblown. Indeed, more than 40 such taxes have already been put in place around the globe. Britain, for example, has a very successful F.T.T. on shares — known as the stamp duty — which raises more than $6 billion a year and has not had a significant impact on the competitiveness of London’s finance sector. Other countries could likewise institute this tax without harming major financial firms.

If more countries introduce F.T.T.’s, it is essential that the tax be used not only to plug holes in European budgets. A financial crisis that began in the trading rooms of New York and London has pushed farmers in Nepal below the poverty line and cost young girls in Zambia their schooling. The problem is global, and our response must be global, too.

 

[JOSEF]

Quote from tomdavis:


3. The author talks about all the tax money the FTT could raise, but fails to disclose the GDP damage (an subsequent job losses) the FTT would cause. The Swedish FTT only raised about 3% of the projected revenues and was a massive net loss to the national treasury as the financial industry fled the country leading to job losses and huge decreases in income tax and capital gains taxes that would have otherwise been paid.

This is a great point that is not emphasized enough. The people in favor of the FTT keep harping on how much money it will raise. But none of the opponents seem to realize that with less trading, there is also going to be much less short term capital gains taxes raised.

 

[Stok]

What really needs to be hammered home is that an FTT is a net negative revenue to guberments....history has proven this and it again, is amazing what the liberals will do and say. Scary stuff that the free world is having to deal with....liberal socialists are the biggest enemies to free societies and they will lie and do anything to get their twisted way.

 

[TraDaToR]

Quote from loufah:

From http://www.nytimes.com/2011/09/29/opinion/to-ease-the-crisis-tax-financial-transactions.html :

A financial crisis that began in the trading rooms of New York and London has pushed farmers in Nepal below the poverty line and cost young girls in Zambia their schooling.

A farmer that have been pushed under poverty line by rising food costs around the world. Yeah. I would love to see the link with Zambia education system too. They forgot to talk about the orphan kid who goes to the mine to pay for his cancer treatment since the government cant' help anymore because of the traders crisis...

 

[Businessman]

A good straightforward piece against the tax :

http://www.ft.com/cms/s/0/318482b6-ea99-11e0-b0f5-00144feab49a.html#axzz1ZaIJwxoS

google [A ‘Robin Hood’ tax is no way to redistribute] if you get a pay wall.

 

[lindq]

Quote from TraDaToR:

A farmer that have been pushed under poverty line by rising food costs around the world. Yeah. I would love to see the link with Zambia education system too. They forgot to talk about the orphan kid who goes to the mine to pay for his cancer treatment since the government cant' help anymore because of the traders crisis...

Given the black hole of debt that is sucking in the finances of the EU, there isn't a chance in hell that any Euros that might come their way are going to escape the pull of that gravity.

The idea that a single cent or grain of rice from a financial transactions tax is going to be put into the hands of a starving mother and child in Africa is a fantasy beyond belief.

Trying to link financial institutions with the failure of world governments to feed their people is a sure sign of the desperation of these fools to find any way to keep funds flowing to their coffers.

To quickly locate the real source of their troubles, these EU brainiacs simply need to glance in the mirror. And the financial institutions that are being targeted need to start pushing back.

 

[keeptradin']

Quote from lindq:

Given the black hole of debt that is sucking in the finances of the EU, there isn't a chance in hell that any Euros that might come their way are going to escape the pull of that gravity.

The idea that a single cent or grain of rice from a financial transactions tax is going to be put into the hands of a starving mother and child in Africa is a fantasy beyond belief.

Trying to link financial institutions with the failure of world governments to feed their people is a sure sign of the desperation of these fools to find any way to keep funds flowing to their coffers.

To quickly locate the real source of their troubles, these EU brainiacs simply need to glance in the mirror. And the financial institutions that are being targeted need to start pushing back.

http://nccp.org/publications/pub_684.html


In America 13 million children live in homes below the poverty level for income, and it's estimated a family needs an income twice the poverty level to make ends meet. Over 36 million people in the US don't have enough to eat. Yet billions in aid are sent each year to other countries to feed their people, much of which is squandered by corruption and theft before the hungry ever see a morsel of food.

Maybe we need a tax in the USA to help feed hungry people here. Oh yeah, that's why we pay income tax.