Live webcast of Ecofin meeting tomorrow from 10:00 CET: http://video.consilium.europa.eu/webcast.aspx?ticket=775-979-11947
1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
Live webcast of Ecofin meeting tomorrow from 10:00 CET: http://video.consilium.europa.eu/webcast.aspx?ticket=775-979-11947
First, a true story. Then, a question.
Ok, here's the true story. And I swear to God this is as close to a verbatim recall as I can convey, a mere 90 minutes after it happened. Ready? Ok...
My 12 year-old nephew--bright kid, but no Little Man Tate--was talking to me about politics. Then I asked him if he'd heard of the "Robin Hood Tax." He said, "No, what's that."
So, I said: "It's a tax they'd make you pay every time you bought shares in the stock of a company."
There was a pause so, by way of tryng to be helpful, I said: "It's a little like the sales tax you pay when you buy a tube of toothpaste, except this is a sales tax when you buy a share of a company."
12 year-old: "But that's stupid."
Me: "Why?"
12 year-old: "Because when you buy toothpaste, you're going to use the toothpaste. When you buy stock, you're just going to sell it to somebody else. The guy who runs the CVS where you buy the toothpaste doesn't have to pay tax on the toothpaste he buys to sell to you. Why do you have to pay tax on a share of a company you're buying to sell to somebody else? And don't you have to pay taxes when you make money selling something anyway?"
Me: "Well, yes, but some people think that would be a good way to raise more tax money to fight climate change."
12 year-old: "How do you fight climate change by taxing people who buy stocks? Aren't you better off taxing people who drive big cars or something?"
Me: "Well, yes, but they also think it'll raise a lot of money for all sorts of good things."
12 year-old (now getting really confused): "But wait, if you have to pay a tax every time you buy a stock, then the moment you buy a stock you're losing money, which means you're not going to want to buy stocks. Which means there's no tax money. Right?"
Me (sighing): "Right."
Ok folks, here's my question:
HOW COME WHAT'S PERFECTLY CLEAR TO A 12 YEAR-OLD IS COMPLETELY OBSCURE TO THE ECONOMISTS OF THE EUROPEAN UNION?
Just thought I'd ask...
Ok, here's the true story. And I swear to God this is as close to a verbatim recall as I can convey, a mere 90 minutes after it happened. Ready? Ok...
My 12 year-old nephew--bright kid, but no Little Man Tate--was talking to me about politics. Then I asked him if he'd heard of the "Robin Hood Tax." He said, "No, what's that."
So, I said: "It's a tax they'd make you pay every time you bought shares in the stock of a company."
There was a pause so, by way of tryng to be helpful, I said: "It's a little like the sales tax you pay when you buy a tube of toothpaste, except this is a sales tax when you buy a share of a company."
12 year-old: "But that's stupid."
Me: "Why?"
12 year-old: "Because when you buy toothpaste, you're going to use the toothpaste. When you buy stock, you're just going to sell it to somebody else. The guy who runs the CVS where you buy the toothpaste doesn't have to pay tax on the toothpaste he buys to sell to you. Why do you have to pay tax on a share of a company you're buying to sell to somebody else? And don't you have to pay taxes when you make money selling something anyway?"
Me: "Well, yes, but some people think that would be a good way to raise more tax money to fight climate change."
12 year-old: "How do you fight climate change by taxing people who buy stocks? Aren't you better off taxing people who drive big cars or something?"
Me: "Well, yes, but they also think it'll raise a lot of money for all sorts of good things."
12 year-old (now getting really confused): "But wait, if you have to pay a tax every time you buy a stock, then the moment you buy a stock you're losing money, which means you're not going to want to buy stocks. Which means there's no tax money. Right?"
Me (sighing): "Right."
Ok folks, here's my question:
HOW COME WHAT'S PERFECTLY CLEAR TO A 12 YEAR-OLD IS COMPLETELY OBSCURE TO THE ECONOMISTS OF THE EUROPEAN UNION?
Just thought I'd ask...
LUXEMBOURG--Greece on Monday became the seventh European Union country to formally back the imposition of a tax on financial transactions, two EU spokespeople told Dow Jones Newswires.[...]
http://www.4-traders.com/news/Greece-Backs-Financial-Transactions-Tax--15315933/
http://www.4-traders.com/news/Greece-Backs-Financial-Transactions-Tax--15315933/
But another added: "Once Croatia enters the EU in July, they will need 10 not nine, and even if they get a green light today, it's only for a proposal, opening up the old arguments about how the tax is designed and actually works."
http://www.google.com/url?sa=t&rct=...6YDoAQ&usg=AFQjCNGnFQaYZRDCkuZOVn2Gyet1AfwQWg
http://www.google.com/url?sa=t&rct=...6YDoAQ&usg=AFQjCNGnFQaYZRDCkuZOVn2Gyet1AfwQWg
Because this is not about making economy better but about controlling the economy and the populus by bureaucratic establishment. Their motto is: the worse it gets the better for us. Laws of logic do not apply in simple ways.
But at the end it is about money. Once banks and corporations are monopolized and controlled by bureaucrats the final stage is to run it to the ground and then privatize in their own hands and the cycle starts again
Italy, Spain Back Financial Transaction Tax - EU Presidency
11 European Countries support.
11 European Countries support.
11 eurozone states ready to launch FTT: EU Tax Commissioner
http://news.ph.msn.com/business/11-eurozone-states-ready-to-launch-ftt-eu-tax-commissioner
"Four additional member states intend to join the enhanced cooperation, which means we arrive at 11," Semeta said after talks among ministers that saw four governments -- Italy, Spain, Slovakia and Estonia -- declare themselves for the tax, sources said.
Nine states are needed to push forward an initiative among a group of EU states under the bloc's "enhanced cooperation" provisions, although a qualified majority must later approve the plans.
Semeta said that member states "should be very clear that agreement on the FTT is a separate issue that has to be discussed here," with disagreement notably on whether revenues would go into a mooted eurozone central budget or be retained by national treasuries.
Britain's George Osborne said he would not stand in the way, but maintained a "specific proposal" was now required before it could guarantee that it would wave through enhanced cooperation among other EU states.
He raised a string of questions, raising the prospect of a lengthy negotiation over the design of the tax, including "does it cover equities, derivatives and foreign exchange transactions?"
http://news.ph.msn.com/business/11-eurozone-states-ready-to-launch-ftt-eu-tax-commissioner
"Four additional member states intend to join the enhanced cooperation, which means we arrive at 11," Semeta said after talks among ministers that saw four governments -- Italy, Spain, Slovakia and Estonia -- declare themselves for the tax, sources said.
Nine states are needed to push forward an initiative among a group of EU states under the bloc's "enhanced cooperation" provisions, although a qualified majority must later approve the plans.
Semeta said that member states "should be very clear that agreement on the FTT is a separate issue that has to be discussed here," with disagreement notably on whether revenues would go into a mooted eurozone central budget or be retained by national treasuries.
Britain's George Osborne said he would not stand in the way, but maintained a "specific proposal" was now required before it could guarantee that it would wave through enhanced cooperation among other EU states.
He raised a string of questions, raising the prospect of a lengthy negotiation over the design of the tax, including "does it cover equities, derivatives and foreign exchange transactions?"
The countries still need to work out the details, though the EU Commission has suggested that trades in bonds and common stock be taxed at 0.1% and trades in derivatives be taxed at 0.01%, Reuters reports.
Hopefully it will take 5 or more years to work out details that become so convoluted and FTT will not work.
Hopefully it will take 5 or more years to work out details that become so convoluted and FTT will not work.
Financial transaction tax gains approval:
http://www.ft.com/cms/s/0/c5a49c1c-1219-11e2-bbfd-00144feabdc0.html#axzz28pXo1Lld
"The deal will mean many of Europeâs biggest stock markets â including Frankfurt, Paris, Milan and Madrid â will be covered by the tax while many of their continental competitors, including London, Amsterdam and Warsaw, will be outside the scheme."
âWith the introduction of a financial transaction tax the liquidity on the Vienna stock exchange would dramatically decrease,â said Michael Buhl, joint chief executive of CEE Stock Exchange Group, which owns the Austrian bourse. âThis in turn would lead to a lower tax base in Austria and thus lower tax revenues.â
âIt is likely to encourage trading on unregulated over-the-counter trading venues rather than driving transactions to exchanges as market players seek to avoid the tax, Deutsche Börse said. âAdditionally, as it stands, the tax will create an environment which practically encourages regulatory arbitrage.â
Maria Fekter, the Austrian finance minister, said: âWe have really only created the on-ramp to the highway. We still have to go a long way to agree on a model, on how it should be formulated in detail, which products. This should be worked out by Christmas.â
Let the games begin
-Guru
http://www.ft.com/cms/s/0/c5a49c1c-1219-11e2-bbfd-00144feabdc0.html#axzz28pXo1Lld
"The deal will mean many of Europeâs biggest stock markets â including Frankfurt, Paris, Milan and Madrid â will be covered by the tax while many of their continental competitors, including London, Amsterdam and Warsaw, will be outside the scheme."
âWith the introduction of a financial transaction tax the liquidity on the Vienna stock exchange would dramatically decrease,â said Michael Buhl, joint chief executive of CEE Stock Exchange Group, which owns the Austrian bourse. âThis in turn would lead to a lower tax base in Austria and thus lower tax revenues.â
âIt is likely to encourage trading on unregulated over-the-counter trading venues rather than driving transactions to exchanges as market players seek to avoid the tax, Deutsche Börse said. âAdditionally, as it stands, the tax will create an environment which practically encourages regulatory arbitrage.â
Maria Fekter, the Austrian finance minister, said: âWe have really only created the on-ramp to the highway. We still have to go a long way to agree on a model, on how it should be formulated in detail, which products. This should be worked out by Christmas.â
Let the games begin
-Guru