 Talks between David Cameron and Angela Merkel reached a stalemate after the UK prime minister said his country would not wish to adopt a so-called 'Tobin tax' on financial transactions unless such measures were introduced on a global scale. So, what’s Cameron's beef with the potential levy? And what would his country lose if it were introduced across the European Union? The measures being mulled include a 0.1 percent charge on stock and bond trades and a 0.01 percent fee for derivatives. The money raised would have a dual benefit for leaders facing their biggest threat to peace and prosperity in the region since World War II.
On the one hand, a Tobin tax could raise trillions of euros at a time when the bloc is facing a dilemma about how to find the money to prop up struggling members. On the other hand such charges could also be a way for some EU leaders to punish a financial industry which, they feel, has played a big part in the crisis. Considering the UK capital is arguably Europe’s financial center, London would have the most to lose. British lawmakers fear the introduction of such a tax may give the industry another excuse to up sticks and move elsewhere. To places like Hong Kong and New York. High earners across the UK have already been facing a 50 percent income tax bill for some time now and their patience is wearing thin. The reality is that banking and other money management is a crucial part of this island's economy and one which, as the recovery falters, politicians can't afford to alienate further. The Financial Times this week suggested that about a quarter of the projected EU-wide income from a Tobin tax on stocks and bonds would come from Britain. If you factor in the nation's enormous derivatives business that number jumps to above 60 percent. And the precedent? Britain has already had its own mixed experience with its stamp duty on purchases of equities. In Sweden, however the reaction was more pronounced after the country's 1984 introduction of a transaction tax on stock and bond purchases and sales. (Experiment on Tobin Tax in Sweden PDF) The revenues raised were less than expected and trading volumes fell, and stock prices fell meaning capital gains taxes also dropped. Supporters of the Tobin tax say it would reduce volatility by dissuading speculators. Those against the proposals say it will dampen trade and add more layers of red tape. Whether you're for or against Tobin taxes they'll take time to implement and that's something Europe doesn't have if it wants to get its house in order. |
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The ordinarries felll while the green beck steadies at 4.65% todays lows broadcast!!!!!
Raising taxes is not the answer. Less government is. Bureaucracy is just not as effective as entrepreneurial initiative and will never be. Government functions should be limited and people should be freed to pursue their own financial security, health care and other luxuries. After all, it's only since the 20th century that big brother has been holding its citizens to ransom in the nanny state..
In a BBC programme called Made in Britain it was pointed out that the banking industry has lots of hidden costs, and ends up costing the UK more than it earns it. I suggest you look into this, as this article seems biased.
Evan Davis was behind the BBC docu "made in britain". He points out banking is costing Britain badly, while the rest are earning. Evan Davis’s response to the familiar complaint that we have forgotten how to make things was a fairly unequivocal “Don’t Panic!”. Although he detailed three causes for concern – a bloated banking sector subsidised by and sucking resources from the rest of the economy, the imbalance between savings and consumption, and the way the UK economy is tilted towards the south and the east – his overall message was a positive one.
As the rest of the world has moved to copy, develop and produce the “bog standard” stuff of manufacture, the UK and other top rank economies have concentrated on the more sophisticated, high-tech and niche end of the market, producing smaller volumes but of greater value.
Our move into the global service sector is another area of wealth generation, as are our expertise in intellectual property, science, invention, branding and advertising. According to Davis, the key to our future is a young literate and numerate workforce willing to embrace adaptability and flexibility in the face of a rapidly changing global economic scene.
I left feeling a bit more positive about our economic prospects.
However, I couldn’t help feeling that Davis was somewhat shackled by his day job. Although he made a joke of it, stating that working for the BBC meant that he didn’t have an opinion, he seemed to veer towards a cautious fence sitting when tackling certain subjects. His comments on the IMF, and in particular the governments latest climate committments left me feeling that he was reluctant to voice overly controversial opinions. Despite being as engaging and entertaining as ever, Davis left me wondering what he REALLY thought.
This article is totally flawed and miss leading. Here is a much better article showing what banking really costs britain. Of course our PM does not want a tax that will hurt us. Bankers has cost us enough already thankyou!
http://conversation.which.co.uk/money/vince-cable-business-secretary-banking-commission-debate/comment-page-1/
I would say that gambling has no place in a real economy. The Tobin tax doesn't get us there. I am tired of listening to the argument that these derivatives traders actually contribute something to our society. I am tired of watching paper shufflers, people who produce nothing, argue how they are actually contributing to society with their taxes. We listened to these low life miscreants for 30 years talk about the wealth they produced for their clients. We see how well that worked out. Money was meant to grease the wheels of trade, nothing more. This argument is indicative of the future. Morals and common sense have been sent to the dustbin. Western societies have managed to create a totally brainwashed society where up is down and down is up. Capitalism and the current money creation scam need to be ended. In the meantime, we'll rattle on about Tobin taxes and other half measures.
@Andrew... Yeah you've made your point, maybe next time just use one comment rather than 3 to make it.
The Super Rich have people in power who will protect them, at all costs. We need to Occupy Wall Street for a long time, until it purges its evil ways.
Tax = Legally Sanctioned Theft
Important: Protect the Super Rich at all costs, even if it means drowning the sinking middle class and burying the poor. This is the world today as the 1% have written the rules, the script, and control the media. When will revolutions start in The West like it is in the Middle East?
Everybody in work should work a 4 day week making room for those who are unemployed. Of course minimum wage must rise to compensate for this but this would be far cheaper than paying for unemployment and welfare benefits. The Super Rich should be starting up new businesses and helping young people to do so. This would increase employment which would ultimately make them richer. So we'd all be winners. We all need more social conscience. Greed is ultimately what is destroying the planet.
"unless such measures were introduced on a global scale". In other words, workers of the world unite. Couldna said it better myself!
Yet, just today news is the "conservative" is likely to win the election in Spain and he's expected to cut taxes on the 1% to "stimulate business". Where have we heard this before? The "conservative" in the U.S. is expected to beat Obama in 2012. And can we guess how he'll treat the 1%? The same! Repeat ad nauseum worldwide!
Has it worked before? EVER? No! The only "success" from these policies worldwide is a successful race to slavery for the 99%!
There are only 2 choices I see to fix this: 1. global "rules of the game" put in place PERMANENTLY, or 2. disallow multinational business and trade PERMANENTLY. Since 2 isn't really an option, well, again, workers of the world unite.
Tax is not theft - but robbery. It's not different from protection money you pay to Mafia - but it at least gets you something.
Current Wall Street does not. It's nothing but a wholesale theft, with High Frequency Trading being the purest, unadulterated form of theft there is. It lets those who paid a bribe to the stock exchange to put their computers in the very same rack as the exchange's servers, and skim profits of every transaction. With the stock being a zero-sum game, any penny looted by HFT traders is a penny less for those who actually invest.
There is not a single honest reason to keep a stock shorter than a few years (beside needing the money for something other than investing). The gambling exists only to let those in power to suck money from the market.
The Tax Man: You just docked?
Popeye: I has.
The Tax Man: Ah ha, let's see here, that'll be 25¢ docking tax.
Popeye: What for?
The Tax Man: Where's your sea craft?
Popeye: It ain't no sea craft, it's me dinghy and it's under the wharf.
The Tax Man: Ah ha. ahh-ha. This your goods?
Popeye: They is.
The Tax Man: Yeah. You're new in town right?
Popeye: If you call this a town, yes.
The Tax Man: Well, first of all, there's 17¢ new-in-town tax, and there's 45¢ rowboat-under-the-wharf tax, and one dollar leaving-your-junk-lying-around-the-wharf tax, so all together, you owe the Commodore $1.87.
Popeye: Uh, who's this Commodore?
The Tax Man: Is that the nature of question? There's a nickel question tax.
Tobin Tax- If Europe wants it then it should be prepared for the shift of its financial power to Europe and Asia. Do not try to push it onto the rest of the world on account of European and Euro mismanagement. Just let Europe ride into the sunset alone.
"facing their biggest threat to peace and prosperity in the region since World War II." .... will they break out the nukes?
I love it. What a great boon for NYC and Wall Street
We welcome the finance industry in Cape Town...it would really make Africa a haven for investors...let them intro the tax and commit Political suicide.
http://pszulu.blogspot.com/2011/10/global-theft-unregulated-capitalism-end.html
Both the big banks and the major industries are sitting on large amounts of cash which will not be used to increase supply until the demand is seen to be returning.
Signing off
Steve
http://www.chandlersca.co.uk
What absolute tdldwae. Let's ignore for a moment that tobin taxes were propsed in the 70 s, seen as fundamentally unworkable, then oproven to be by the Swedish when they tried it.Let's also ignore that the EC themselves say that such a tax would raise revenues ONLY at the expense of other taxes, and the net revenue would be a negative change. Richard Murphy clearly does not understand tax incidence. I am an interest rates trader in a bank, so let me tell you what would happen in my markets;I will pass 100% of the costs of the new tax to my customers the bulk of which are pension funds and corporates. The speculators' will simply move to derivative products which aren't taxed. The banks won't pay a thing, but the costs for end users will go up massively. Markets will be less liquid, more volatile and make it even more likely blowups happen. In short, tobin taxes are a pretty stupid idea I guess that is why the EU politicos like the so much.
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