Eleven euro states back financial transaction tax

Comments (15)
gregbrew56 wrote:

If I’m reading this right, the major players that helped exacerbate the financial meltdown will now be paying part of the cost?

Wow! What a concept!

Now, if they just find a place to send the money that makes sense. That’s the rub.

Oct 09, 2012 10:57am EDT  --  Report as abuse
breezinthru wrote:

I can see why hedge funds would be opposed to the Tobin tax. They are not accustomed to appropriate taxation on their income.

But banks? That is a curious situation. Insolvent banks are routinely and repeatedly bailed out by governments. Now those nearly insolvent governments wish to fund themselves by taxing the banks who, in spite of massive bailouts, are still insolvent?

Oct 09, 2012 11:06am EDT  --  Report as abuse
breezinthru wrote:

I can see why hedge funds would be opposed to the Tobin tax. They are not accustomed to appropriate taxation on their income.

But banks? That is a curious situation. Insolvent banks are routinely and repeatedly bailed out by governments. Now those nearly insolvent governments wish to fund themselves by taxing the banks who, in spite of massive bailouts, are still insolvent?

Oct 09, 2012 11:06am EDT  --  Report as abuse
totherepublic wrote:

Ah, one question. Isn’t there this pesky little thing about “taxation without representation” in our Constitution? So who would be representing the interests of the American People (surely NOT the obama administration) if this was “IMPOSED” on us? That might be something we need to work out BEFORE even considering to be a part of this. Just saying.

Oct 09, 2012 11:51am EDT  --  Report as abuse
Randy549 wrote:

Fools. All that will occur is that trading will move elsewhere and they will lose.

Oct 09, 2012 12:04pm EDT  --  Report as abuse
usagadfly wrote:

At last! A tax on the monsters that wrecked the world!

Aggregates beyond a certain size should be outlawed, as should all aggregates of more than a single rating of debt. The hucksters would not like their products to be understandable. Default insurance should be limited in maximum size, with excessive blanket guarantees made invalid and unenforceable in court.

Europe is headed in a sane direction! If free marketeers want to avoid this, then they should accept size limits on the asset size of entities that play. No more institutions big enough to require Government rescue should be allowed to play with derivatives. And should also be forbidden to make any kind of political donation whatsoever.

Oct 09, 2012 12:24pm EDT  --  Report as abuse
dareconomics wrote:

A financial transactions tax is a bad idea. The politicians are running out of money to keep the euro welfare system together, and people resent the banks’ and hedge funds’ large profits and dodgy behavior. The EU is combining both facts into a financial transactions tax that appears to punish banks and hedge funds while increasing revenue.

The problem is that this is the 21st Century, and if you tax holdings in cyberspace these assets will move at the stroke of a key to an untaxed jurisdiction. All of the large banks have operations around the globe. If a tax is levied on a derivative transaction in Berlin, you can just perform the transaction in untaxed New York or London.

The nations proposing this tax claim it will raise €57bn in revenue while reducing volatility due to decreased transactions. The tax will fail on both counts.

The tax will miss its revenue projections as more business is moved from the taxed jurisdictions to untaxed havens. Since this business will be moved to other jurisdictions, so will the attached high-paying financial services jobs. The eleven countries will also miss the tax revenue generated from these jobs.

Volatility will not be reduced either. The transactions will still take place just in different locales. Furthermore, the bifurcation of the EU into transactions taxed and untaxed areas will increase volatility by creating two smaller markets rather than one large one.

Another overlooked fact is that everyone will be paying this tax. It’s easy for Deutsch Bank to move assets around the globe, but Johan, Jean, Juan and Giovanni will have no choice but to pay the tax whenever they buy or sell stocks and bonds. A tax that is meant to punish institutions will instead punish regular people.

Note that Spain and Italy joined the group of 11 late. The Germans applied “diplomatic pressure” to obtain their acquiescence to the measure. You can bet that the switch has everything to do with the German pocketbook. This action will only add to the periphery’s resentment of Germany.

dareconomics.wordpress.com

Oct 09, 2012 12:45pm EDT  --  Report as abuse
emu wrote:

dareconomics: “these assets will move at the stroke of a key to an untaxed jurisdiction”

That’s correct and intended. One of the goals is a curb on high speed trading. If it’s out of our exchanges, /your/ exchanges have to deal with it.

Oct 09, 2012 1:28pm EDT  --  Report as abuse
x_diver wrote:

Have you ever heard of cause and effect? The traders who provide most of the liquidity will move their business to London, the US, and Asia. Aa a result:

- that $52 billion that they’re hoping to collect in taxes will end up being closer to zero.
- tens of thousands of jobs will be lost.
- bid/ask spreads will widen and cost people more to buy and sell – in addition to the new tax.
- fewer people will participate in the market leading to larger players dictating the cost of everything.

Nice plan. Sounds more like communism. Sell Eurex, buy CME and NYSE-LIFFE.

Oct 09, 2012 1:42pm EDT  --  Report as abuse
emu wrote:

x_diver: “tens of thousands of jobs will be lost”

Robotrading requires /huge/ numbers of personnel, doesn’t it?

Oct 09, 2012 2:18pm EDT  --  Report as abuse
JaneMcQueen wrote:

If you think the banks will pick up the cost of this then you are deluded, it’s to be levied on transactions that the banks carry out. So it’s a tax on buying and selling shares amongst other things, so all the banks will do is increase their fee for doing such transactions so the cost will not be picked up by the banks but by the people buying the shares.

If they get in to trouble for doing that, then they will just add on an extra charge on to people having bank accounts and recoup the money that way. The only people who will foot the bill for this extra tax is the everyday person who uses the bank not the bank’s themselves.

That’s for those that actually decide to trade with those banks who are liable to pay this tax, the only thing it is good for is helping shift business to the likes of London which is jolly good for the UK Economy, not so good for the Eurozone.

Oct 09, 2012 3:05pm EDT  --  Report as abuse
JapanViewer wrote:

Brilliant idea, but won’t work unless applied to all markets around the globe. A good start though. Hopefully the rest of the world’s governments will follow.

Oct 09, 2012 4:34pm EDT  --  Report as abuse
totherepublic wrote:

JapanViewer
Global socialism/communism. Yeah that is freedom, you bet. One big wrinkle in all of that: The United States Constitution. Just a small thing, right? A “bump in the road”? Where did I hear that?

Oct 09, 2012 7:29pm EDT  --  Report as abuse
scythe wrote:

Eurozone implementation of the “Tobin tax” is the
equivalent of Australia’s explicit cancer images on cigarette packets

The cigarette/lung cancer manufacturers didn’t want a precedent for other countries to follow

The last man standing alone on the Tobin-style tax will be the Uk
and the EAD-BAE and other Uk-based mergers will be undecided ….

Oct 10, 2012 3:52am EDT  --  Report as abuse
TommyAD wrote:

The proposed Financial Transaction Tax (also known as the “FTT,” “Tobin Tax” or “Robin Hood Tax”) is not a tax on Wall Street – It’s a tax on Main Street.

• The Secretary General of the European Federation for Retirement Provision says the FTT is not a tax on Wall Street, but rather a tax on retirement savings and other “innocent bystanders.”

• A study by the Dutch Central Bank showed that over 40% of the FTT would be paid by pensions and retirement savings

• James Tobin’s co-author, Berkeley Professor Barry Eichengreen, says the Tobin tax is the “wrong tool” to raise revenues.

• A study by the World Bank concluded that “… neither the tax revenues nor the efficiency gains hoped for… are likely to materialize.”

• The IMF showed that the best way to hold banks responsible is to tax them directly because the FTT tax burden would “fall largely on final consumers,” not the financial sector.

• Archbishop Desmond Tutu once supported the FTT, but now opposes it.

To learn why a diverse group of people from many different backgrounds opposes the FTT, please read “Straight talk about the FTT” at: www.financialtransactiontaxes.com . (Includes over 40 references with research from experts around the world.)

Oct 10, 2012 8:22am EDT  --  Report as abuse
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