1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
Bad bad day indeed... Non participating countries involved in the discussions is just bullshit. The final vote will take place between participating ones. Semeta had a little smile while responding to this...The extra-territorial reach will likely be voted by participating countries... Taxing foreigners is a no brainer when it comes to politicians.
Now there must be a strong response from the international finance countries to say " This won't float. We won't accept our citizens to be taxed on our exchanges just because they happened to trade with an anonymous euro counterpart, you drop that part or we won't accept FTT advocates on our exchanges anymore..."
Now there must be a strong response from the international finance countries to say " This won't float. We won't accept our citizens to be taxed on our exchanges just because they happened to trade with an anonymous euro counterpart, you drop that part or we won't accept FTT advocates on our exchanges anymore..."
This part is interesting:
"Those based outside the tax zone â such as Barclays or Goldman Sachs â cannot be forced to pay the tax. But if their counterparty is liable, the full levy will be paid to eurozone statesâ coffers, if necessary by the eurozone trading party alone. "
This is what we expected, the eurozone party paying both taxes, but I am not sure it's what Semeta has in mind. Perhaps I missed something in the conference.
"Those based outside the tax zone â such as Barclays or Goldman Sachs â cannot be forced to pay the tax. But if their counterparty is liable, the full levy will be paid to eurozone statesâ coffers, if necessary by the eurozone trading party alone. "
This is what we expected, the eurozone party paying both taxes, but I am not sure it's what Semeta has in mind. Perhaps I missed something in the conference.
This quote is quite interesting:
Officials said in practice, buyers and sellers would have to indicate whether they were liable for the tax when they agreed a transaction, as well as whether they had agreed to share the cost.
This sounds like a huge mess in the making. Let the court cases begin...
-Guru
EU approves financial transaction tax for 11 eurozone countries
UK abstained in vote but Germany and France among nations to impose FTT levy despite warnings by banks over losing trade
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Phillip Inman and agencies
The Guardian, Tuesday 22 January 2013 13.07 EST
The EU has approved financial transaction tax for 11 countries including France and Germany. FTT could raise as much as â¬35bn. Photograph: Rolf Haid/EPA
Germany, France and nine other eurozone countries have been given the green light to impose a financial transaction tax, despite warnings from banks and business groups that it will drive share, currency and derivative trading out of Europe.
EU finance ministers gave their approval at a meeting in Brussels, allowing 11 states to pursue a levy on financial transactions. The UK abstained in the vote alongside Luxembourg and the Czech Republic.
Eleven countries won the EU's backing for a financial transaction tax (FTT), with Germany, France, Italy and Spain adding their names to eurozone neighbours Austria, Portugal, Belgium, Estonia, Greece, Slovakia and Slovenia.
The UK, which already imposes a tax on share trades, could benefit from a shift in banking business if Germany and France tax foreign exchange or derivatives trading in Frankfurt and Paris.
The levy, which could raise as much as â¬35bn (£29.3bn) a year for the 11 countries, is designed to prevent a repeat of the conditions that stoked the credit crunch by reining in investment banks. Following the decision, the European Commission will put forward a new proposal for the tax, which if agreed on by those states involved, would mean the levy could be introduced within months. Although critics say such a tax cannot work properly unless applied worldwide or at least across Europe, countries such as France are already banking on the extra income from next year.
"We will be able to put it into place quickly," said Benoit Hamon, a junior minister in the French finance ministry who was at the meeting.
A tax would raise the costs of individual trades, which economists suspect are carried out by banks to extract commissions and fees from fund managers that handle large pension funds.
Opinion is divided over whether banks would continue to trade at current levels and pay the tax or cut back on the number of trades, potentially saving pension schemes millions of pounds.
Algirdas Semeta, the European commissioner in charge of tax policy, said: "This is a major milestone in tax history."
Under EU rules, a minimum of nine countries can co-operate on legislation using a process called enhanced co-operation as long as a majority of the EU's 27 countries give their permission.
Germany and France decided to push ahead with a smaller group after efforts to impose a tax across the whole EU and later among just the 17 eurozone states foundered. Sweden, which tried and abandoned its own such tax, has repeatedly cautioned that the levy would push trading elsewhere.
Critics say the levy could open another rift in Europe, where the 17 states using the euro are deepening ties in order to underpin the currency, and there is the growing risk that Britain could even leave the European Union.
The CBI said the tax, based on an idea proposed by US economist James Tobin more than 40 years ago, would place another barrier to growth in the eurozone because the costs would ultimately be passed on to consumers and savers.
Matthew Fell, CBI director for competitive markets, said: "The UK government is right to reject a FTT as damaging for jobs and growth.
"It is disappointing that eurozone economies are pursuing the FTT, whose costs ultimately fall on consumers and businesses, and will be a drag on the eurozone recovery.
"As the UK's largest single trading partner, a healthy European economy is in everyone's interests so we urge participating member states to reconsider this tax."
UK abstained in vote but Germany and France among nations to impose FTT levy despite warnings by banks over losing trade
Share 9
inShare
1
Phillip Inman and agencies
The Guardian, Tuesday 22 January 2013 13.07 EST
The EU has approved financial transaction tax for 11 countries including France and Germany. FTT could raise as much as â¬35bn. Photograph: Rolf Haid/EPA
Germany, France and nine other eurozone countries have been given the green light to impose a financial transaction tax, despite warnings from banks and business groups that it will drive share, currency and derivative trading out of Europe.
EU finance ministers gave their approval at a meeting in Brussels, allowing 11 states to pursue a levy on financial transactions. The UK abstained in the vote alongside Luxembourg and the Czech Republic.
Eleven countries won the EU's backing for a financial transaction tax (FTT), with Germany, France, Italy and Spain adding their names to eurozone neighbours Austria, Portugal, Belgium, Estonia, Greece, Slovakia and Slovenia.
The UK, which already imposes a tax on share trades, could benefit from a shift in banking business if Germany and France tax foreign exchange or derivatives trading in Frankfurt and Paris.
The levy, which could raise as much as â¬35bn (£29.3bn) a year for the 11 countries, is designed to prevent a repeat of the conditions that stoked the credit crunch by reining in investment banks. Following the decision, the European Commission will put forward a new proposal for the tax, which if agreed on by those states involved, would mean the levy could be introduced within months. Although critics say such a tax cannot work properly unless applied worldwide or at least across Europe, countries such as France are already banking on the extra income from next year.
"We will be able to put it into place quickly," said Benoit Hamon, a junior minister in the French finance ministry who was at the meeting.
A tax would raise the costs of individual trades, which economists suspect are carried out by banks to extract commissions and fees from fund managers that handle large pension funds.
Opinion is divided over whether banks would continue to trade at current levels and pay the tax or cut back on the number of trades, potentially saving pension schemes millions of pounds.
Algirdas Semeta, the European commissioner in charge of tax policy, said: "This is a major milestone in tax history."
Under EU rules, a minimum of nine countries can co-operate on legislation using a process called enhanced co-operation as long as a majority of the EU's 27 countries give their permission.
Germany and France decided to push ahead with a smaller group after efforts to impose a tax across the whole EU and later among just the 17 eurozone states foundered. Sweden, which tried and abandoned its own such tax, has repeatedly cautioned that the levy would push trading elsewhere.
Critics say the levy could open another rift in Europe, where the 17 states using the euro are deepening ties in order to underpin the currency, and there is the growing risk that Britain could even leave the European Union.
The CBI said the tax, based on an idea proposed by US economist James Tobin more than 40 years ago, would place another barrier to growth in the eurozone because the costs would ultimately be passed on to consumers and savers.
Matthew Fell, CBI director for competitive markets, said: "The UK government is right to reject a FTT as damaging for jobs and growth.
"It is disappointing that eurozone economies are pursuing the FTT, whose costs ultimately fall on consumers and businesses, and will be a drag on the eurozone recovery.
"As the UK's largest single trading partner, a healthy European economy is in everyone's interests so we urge participating member states to reconsider this tax."
By GABRIELE STEINHAUSER And VANESSA MOCK
this is from Wall Street Journal
BRUSSELSâThe European Union gave the green light on Tuesday for 11 states that account for two-thirds of the bloc's economy to impose a small tax on trades in stocks, bonds and derivatives.
If implemented as planned, the levy could transform financial-market flows in Europe, but many observers expect difficult negotiations ahead to diminish its impact.
The European Commission, the EU's executive arm, had hoped to create a financial-transaction tax for all 27 EU member states. But that plan was quickly blocked by the U.K., home to the City of London trading hub, and several other countries worried that it would lead investors to switch their trades to the U.S. or Asia.
Germany and France, eager to show their electorates that they could recoup some of the cost of the financial crisis from banks and other firms, decided to push ahead anyway.
More
Ireland, Portugal May Tap ECB's Bond-Buying Program
They persuaded Spain, Italy, Belgium, Estonia, Greece, Austria, Portugal, Slovenia and Slovakia to join in and on Tuesday got a majority of EU states to allow them to proceed with the tax.
Algirdas Semeta, the EU's taxation commissioner, called the deal a "major milestone" in European and global tax history. "For the first time ever, a financial-transaction tax will be applied at regional level," he said. "A bloc representing about two-thirds of EU [gross domestic product] will implement this fair tax together, answering the longtime calls of their citizens."
Mr. Semeta said he would make a detailed pitch for the transaction tax for the 11 countries before the end of February and aimed to stick closely to his original proposal. Under that plan, a 0.1% tax would be imposed on trades in stocks and bonds, while derivative transactions would be taxed at 0.01%. The proposal would then need unanimous approval from all 11 participating states.
How much money the tax could raiseâand what it would be used forâis still unclear and would depend heavily on its final form.
In its original proposal, the commission estimated that the tax could generate as much as â¬57 billion ($76 billion) a year if it were applied across the EU. On Tuesday, Mr. Semeta said the same levy applied for just 11 states should raise more than a proportional share of that â¬57 billion, because of the complex way in which the tax base is calculated. France, however, has estimated that the levy could generate around â¬10 billion for the 11 participants.
Even though the idea of a small levy on financial transactions, also known as the "Tobin tax" after American economist James Tobin, has been around for decades, it has never been implemented on a grand scale.
Critics warn that unless it is imposed on a global level, a broad financial-transaction tax could just push investors to conduct their trades elsewhere.
But Mr. Semeta said that the commission had come up with a way of levying the tax that prevents investors from relocating. The tax would be imposed on both the buyer and the seller of a financial instrument, as long as either of the two parties is based in one of the participating countries or acting on behalf of someone based in one of those countries.
That means that even investors in London or New York may not fully escape the tax.
Financial firms across Europe, nevertheless, warned that such a tax could hurt the participating countries.
"The ones who suffer would be companies trying to hedge against exchange risks as well as citizens with savings targetsâparticularly for their pensions," Germany's major banking associations said in a joint statement.
Many observers believe that these risks may lead even the 11 countries that have pushed for the tax to end up with a less-ambitious levy, similar to the stamp duties that exist in France and the U.K.
"Even if the technical issues can be resolved, it's hard to imagine successfully implementing such a tax on stock-exchange transactions in Paris, Frankfurt and a few other countries but not in London, New York, or various exchanges in Asia," said Daniel Berman, an adjunct professor at Boston University School of Law and an expert in international taxation.
this is from Wall Street Journal
BRUSSELSâThe European Union gave the green light on Tuesday for 11 states that account for two-thirds of the bloc's economy to impose a small tax on trades in stocks, bonds and derivatives.
If implemented as planned, the levy could transform financial-market flows in Europe, but many observers expect difficult negotiations ahead to diminish its impact.
The European Commission, the EU's executive arm, had hoped to create a financial-transaction tax for all 27 EU member states. But that plan was quickly blocked by the U.K., home to the City of London trading hub, and several other countries worried that it would lead investors to switch their trades to the U.S. or Asia.
Germany and France, eager to show their electorates that they could recoup some of the cost of the financial crisis from banks and other firms, decided to push ahead anyway.
More
Ireland, Portugal May Tap ECB's Bond-Buying Program
They persuaded Spain, Italy, Belgium, Estonia, Greece, Austria, Portugal, Slovenia and Slovakia to join in and on Tuesday got a majority of EU states to allow them to proceed with the tax.
Algirdas Semeta, the EU's taxation commissioner, called the deal a "major milestone" in European and global tax history. "For the first time ever, a financial-transaction tax will be applied at regional level," he said. "A bloc representing about two-thirds of EU [gross domestic product] will implement this fair tax together, answering the longtime calls of their citizens."
Mr. Semeta said he would make a detailed pitch for the transaction tax for the 11 countries before the end of February and aimed to stick closely to his original proposal. Under that plan, a 0.1% tax would be imposed on trades in stocks and bonds, while derivative transactions would be taxed at 0.01%. The proposal would then need unanimous approval from all 11 participating states.
How much money the tax could raiseâand what it would be used forâis still unclear and would depend heavily on its final form.
In its original proposal, the commission estimated that the tax could generate as much as â¬57 billion ($76 billion) a year if it were applied across the EU. On Tuesday, Mr. Semeta said the same levy applied for just 11 states should raise more than a proportional share of that â¬57 billion, because of the complex way in which the tax base is calculated. France, however, has estimated that the levy could generate around â¬10 billion for the 11 participants.
Even though the idea of a small levy on financial transactions, also known as the "Tobin tax" after American economist James Tobin, has been around for decades, it has never been implemented on a grand scale.
Critics warn that unless it is imposed on a global level, a broad financial-transaction tax could just push investors to conduct their trades elsewhere.
But Mr. Semeta said that the commission had come up with a way of levying the tax that prevents investors from relocating. The tax would be imposed on both the buyer and the seller of a financial instrument, as long as either of the two parties is based in one of the participating countries or acting on behalf of someone based in one of those countries.
That means that even investors in London or New York may not fully escape the tax.
Financial firms across Europe, nevertheless, warned that such a tax could hurt the participating countries.
"The ones who suffer would be companies trying to hedge against exchange risks as well as citizens with savings targetsâparticularly for their pensions," Germany's major banking associations said in a joint statement.
Many observers believe that these risks may lead even the 11 countries that have pushed for the tax to end up with a less-ambitious levy, similar to the stamp duties that exist in France and the U.K.
"Even if the technical issues can be resolved, it's hard to imagine successfully implementing such a tax on stock-exchange transactions in Paris, Frankfurt and a few other countries but not in London, New York, or various exchanges in Asia," said Daniel Berman, an adjunct professor at Boston University School of Law and an expert in international taxation.
Crystal Ball.
You guys focus too much on historical events like QMV this or QMV that. EU tax is in because bureaucrats have too fulfill pipe dream of some big Ego in EU commission.
The real issue is the future: How it will be implemented and enforced and if the rest of the world will catch the disease.
For now EU news is good news because they will never agree on anything of substance regarding this tax and the whole FTT noise will die the moment FTT is reality because it will not matter.