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

Quote from listedguru:

Sounds like the CBO views the ftt as a negative. They definately say it's a short term negative in most instances and the long term is unclear. I think this report bodes very well for the anti ftt argument.

-Guru
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Key anti-FTT conclusions from the CBO report:

(1) FTT proponents make the claim that the FTT will reduce volatility which is refuted in this CBO report: “However, the tax would discourage all short-term trading, not just speculation—including transactions by well-informed traders and transactions that stabilize markets. Empirical evidence provides little indication that a transaction tax would reduce volatility. In fact, a number of research studies have concluded that higher transaction costs are associated with more, not less, volatility. (Footnote: See, for example, Thornton Matheson, Taxing Financial Transactions: Issues and Evidence, Working Paper WP/11/54 (International Monetary Fund, March 2011); and Neil McCulloch and Grazia Pacillo, The Tobin Tax— A Review of the Evidence Institute of Development Studies, University of Sussex, March 23, 2011).”

(2) The CBO Report is consistent with both the IMF study and EU Impact Assessment Report concluding that the FTT will have negative impact on GDP: “In the short run, lower output, employment, and income in the financial sector would lessen the demand for goods and services and reduce GDP and employment.”

(3) The CBO Report reached the same conclusion as the IMF Study, the AGP report from the Netherlands and Professor Lars Oxelheim's study from Sweden which projected the FTT would extract a heavy toll on pensions plans and retirement savings. The Oxelheim study forecasts a 5% reduction in pensioners income as a result of the tax. “The transaction tax would also affect the funding of state and local pension plans (which held about $3 trillion in assets as of June 2011). Besides initially reducing the value of their existing assets slightly, the tax would raise transaction costs for pension plans. Both of those effects would increase required contributions to the plans.”

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That said, I expect Defazio and Harkin to shout from the treetops that the CBO report strongly favors the introduction of a financial transactions tax.
 
Still to read the entire CBO report. But it's a good report for us and glad Senator Hatch requested an official report to put out the FTT match from lighting a fire. We don't want GOP blocks and fillibusters, without explanation, we want CBO reports concluding that a specific tax proposal is a bad idea.

This CBO report should also be used to buttress and have Cameron's back a little. He took all the heat in Europe, while Obama played some mixed-message games at the G-20. I hate that BS line, we would support it if it was global talk, that's a lie and meant to appease FTT forces for charity. Obama should have took down Merkel and Sarkozy heavy on FTT and faster ECB pump priming.

We can fill in the blanks on the CBO report where needed as we keep posting. I just added my new and unique comments to WSJ and Hill articles just linked in prior posts.
 
http://www.nytimes.com/2011/12/13/w...man-official-backs-tax-vetoed-by-britain.html

Another NYT FTT puff piece. This writer just cut and pasted a paragraph from their last puff piece. Why give credibility to Westerwelle over Cameron?

Seems like a full court press from Brussels and Germany to intimidate the UK into a yes vote, which they say is still open. So there will be talk of navigating around the UK veto with user fees and tougher financial regulations from Brussels anyway.

UK minority parties are second guessing Cameron on this same theme. Hope Cameron can hold firm.
 
The Debt Office said no to the EU Commissions´s proposal for a tax on financial transactions. The Authority considers that the proposal is "extremely ill-conceived and built", and argues that the tax would have serious effects on the Swedish financial markets.
"This applies particulary to the markets for government securities, where the basic conditions for secondary trading more or less disappear" writes the Debt Office in its response.
(googletranslation from swedish)
 
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