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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe Most Popular Tax in History Has Real Momentum
http://www.thenation.com/blog/179679/why-most-popular-tax-history-has-real-momentumA demonstraton in London in support of a Robin Hood Tax. (Reuters/Andrew Winning)
The European Financial Transaction (a?k?a Robin Hood) tax scored a big legal victory on April 30, when a challenge regarding the legality of the tax brought by the British government was thrown out by the European Court of Justice. The ECJ has struck a serious blow for fairness, as the dismissal essentially chastises the British government for championing the interests of the UKs financial industry over those of its citizens. David Hillman, spokesperson for the Robin Hood campaign, told The Guardian, This futile legal challenge tells you all you need to know about the governments misguided priorities: it would rather defend a privileged elite in the City than support a tax that could raise billions to tackle poverty and protect public services.
Whats more, these misguided priorities of David Camerons government became all the more apparent last Friday, when an analysis of the Bank of Englands £375 billion stimulus program determined that those public funds, according to the International Business Times, [have] made the wealthiest 5% even richer, worsened the economic recovery, made pension pots smaller, failed to stimulate business investment, and given a bonus to financial services. To recap, then, Britains response to the financial crisis has included flogging for the finance industry at the ECJ and giving them a £375 billion gift from the public cofferswhat one analyst actually calls a Robin Hood tax in reverse.
In this environment, then, the real, non-reversed Robin Hood tax has serious momentum within Europe, just as the eleven-nation coalition behind it is expected to make an important announcement about the first phase of the tax on May 5 or 6. The proposed tax includes a 0.1 percent tax on stock and bond trades and a tax of 0.01 percent on derivatives. Its now expected that the tax will indeed be phased in, with the levy on stock-trades comprising the first step. Reportedly, the finance ministers involved in the negotiations plan to use the rest of the year to negotiate over taxes on derivative-trading, which could be introduced later in a second phase. While the German government is reportedly determined to get an agreement from the outset to include derivatives, there has been some resistance, including from the supposedly more left-wing French government.
The Robin Hood Tax is, as European FTT campaigners say, the most popular tax in history, and such high regardeven for something as seemingly unromantic as a 0.1 percent taxisnt difficult to understand: FTT revenue can be used to create jobs; spur economic development beyond the financial industry; and combat climate change, global poverty and HIV/AIDS. One measure of the taxs popularity is that this weeks announcement about the FTTs first phase has been scheduled to occur during the lead-up to the European Parliament elections of May 2225, and support for the tax is expected to be a major vote-getter. Not exactly an American-election-style October Surprise to be sure, but certainly a signal to candidates: Robin Hood matters to European citizens. You can lend your name to the movement, too, by signing the 1 Million Strong petition.
el_bryanto
(11,804 posts)Are they imposing that in interest payments or on purchases and sales?
Bryant
CincyDem
(6,351 posts)Primarily focused on options traders, the tax would be collected on the buy and sell side. There's also some talk about transaction fees on futures trades but that's a lot more complicated because, in the ultimate use of "other people's money", there's virtually no cost involved in a futures trade - just profit and loss.
It isn't getting a lot of traction yet. Hopefully, support in the euro-zone will rejuvenate it here.
Spitfire of ATJ
(32,723 posts)To each other they talk about "selling stocks" and "buy low, sell high" but when you talk "sales tax" they claim there's no selling at all. They claim they are "trading". They call the Stock Market the "Stock Exchange" and "The Trading Floor" as if they are on the barter system and no actual cash is involved. It's all a legal fiction to avoid paying what everyone else pays.
truedelphi
(32,324 posts)"no cash in involved," then maybe we could have kept pressure on the federal Government and Congress to not bail those folks out - at a cost of $ 200,000 per man, woman and child alive in the USA (But considerably poorer due to how we "had to" Bailout the Big Banks and Wall Street folks.
Spitfire of ATJ
(32,723 posts)Problem is a bunch of instruments were worth LESS than they claimed and they got caught.
Not by the law, but by the RICH.
PoliticAverse
(26,366 posts)more derivative trading.
CincyDem
(6,351 posts)I don't think it's a 0.01% tax on derivatives - I think it's an incremental 0.01%.
If it were likely that this move would increase derivative trading, I think the banks would support it lock stock and barrel. It's hard to imagine more institutional derivative trading.
The gross domestic product of the entire globe is something like 65 Trillion bucks. The global derivatives market is something like 225 Trillion bucks. It's insane.
And it's a zero sum game - meaning that for every dollar made by someone, there's a dollar lost by someone else. This is the hand-to-hand combat of the financial world and when chit goes against you, there's no "waiting it out for the market to come back". It's over. It's the fastest way to transfer money out of your account that's still legal.
Trading as a retail consumer in the derivatives isn't like taking a knife to a gun fight - it's like taking a picture of a knife to a nuclear bomb fight. Really bad odds.
So - if there was a chance this would increase "fresh meat" via retail participation in the derivative market - they'd be all over it.
malaise
(268,930 posts)Rec
The Wizard
(12,541 posts)when Wall Street has enough of Congress on the payroll to ensure this is impossible?
okaawhatever
(9,461 posts)try to get all the stock markets to pass it so no one has an advantage or disadvantage. That was one of the complaints to begin with. I think we should jump on this as soon as the EU begins theirs.
ProSense
(116,464 posts)By FLOYD NORRIS
To the dismay of the United States government not to mention Wall Street much of Europe seems poised to begin taxing financial trading as soon as next year.
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Under the proposal, a trade of shares worth 10,000 euros would face a tax of one-tenth of 1 percent, or 10 euros. A trade of a derivative would face a tax of one-hundredth of 1 percent. But that tax would be applied to the notional value, which can be very large relative to the cost of the derivative. So a credit-default swap on 1 million euros of debt would have a tax of 100 euros, or about 0.4 percent of the annual premium on such a swap....there would nevertheless be significant changes changes that might be for the better in some ways. High-frequency trading, which was encouraged by allowing prices to move in increments of a penny or less, and by technological advances, would be discouraged. So too would be some of the strategies used by hedge funds that involve trades expected to yield very narrow but presumably very safe profits. To make such trades worth doing, funds borrow a lot of money and make the trades using very little equity...One objective, says Algirdas Semeta, the European Union commissioner in charge of tax policy, is to reorient the financial system back to financing the real economy.
But can Europe pull it off? Will trading simply migrate to other jurisdictions, such as the United States and Britain, which want nothing to do with the tax? Europeans seem confident. The tax would be owed no matter where the trade took place, as long as a European security or European institution was involved. The law has been written so broadly that if a French bank bought shares in an American company on the New York Stock Exchange, the tax would be owed...the European Commission director for indirect taxation and tax administration and a primary designer of the tax plan, calls it a Triple A approach all markets, all actors and all products.
To get out of the tax, a financial institution would have to do more than simply move its headquarters out of the 11 countries that now plan to impose the tax. It would also have to forgo serving clients in any of those countries and trading in securities or derivatives from any of the countries. Officials are confident that no major institution will be willing to forsake such large markets as France, Germany, Italy and Spain.
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http://www.nytimes.com/2013/02/22/business/a-tax-that-could-change-the-trading-game.html?&pagewanted=all
WASHINGTON, D.C. Senator Tom Harkin (D-IA) and Congressman Peter DeFazio (D-OR) today welcomed a vote taken by 27 EU finance ministers to allow a group of 11 European governments to implement a financial transaction tax. The action allows for a tax of 10 basis points on stocks and 1 basis point on derivatives on financial transactions by the following countries: Germany, France, Italy, Spain, Belgium, Austria, Greece, Portugal, Slovakia, Slovenia, and Estonia.
In the U.S. Congress, Senator Harkin and Congressman DeFazio have introduced The Wall Street Trading and Speculators Tax, which applies a three basis point tax (or 3 cents on every $100 financial transaction.) The Congressional Joint Tax Committee scored their proposal as raising $352 billion over 10 years in the last Congress. The lawmakers will reintroduce their measure in the coming weeks.
The lawmakers will reintroduce their measure in the coming weeks, including an exemption for retirement and education savings.
Our transaction tax proposal raises considerable revenue with little impact on economically beneficial transactions, said Harkin. It is a tax that does not harm small businesses or the middle class and Wall Street can certainly afford it. I applaud the action taken by the EU today and hope that we will soon have U.S. action on this issue.
In the coming months, our country will need to make hard decisions to get back on sound fiscal footing. Our financial transaction tax should be a no-brainer. This tax would target speculators who create tremendous volatility by flipping stocks a thousand times a minute. I, too, applaud the EU. Today's actions mean there will be less opportunity to shift U.S. trading overseas to avoid a U.S. FTT. Wall Street's criticisms of an FTT are rapidly shrinking, said DeFazio.
http://www.harkin.senate.gov/press/release.cfm?i=339332
Lawmakers Introduce Targeted Wall Street Trading Tax
http://www.harkin.senate.gov/press/release.cfm?i=334643
The Myth of the Rich Who Flee From Taxes
http://www.democraticunderground.com/10022397707
By Katrina vanden Heuvel
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We dont need a team of policymakers to tell us this isnt good policy, or that it needs changing. But on Thursday, we heard policymakers propose exactly that: a change.
Sens. Tom Harkin (D-Iowa) and Sheldon Whitehouse (D-R.I.), along with Rep. Pete DeFazio (D-Ore.), unveiled a bill that would place a light tax on all financial transactions three pennies on every $100 traded.
The good news is that its a tax so small it could be mistaken for a rounding error. Its so small, Wall Street could easily afford it and the average E-Trade investor would barely notice it. If this were a tax on coffee, it would cost you $1 for every 800 cups you bought at Starbucks.
But theres even better news. This insignificant tax raises a significant amount of revenue $352 billion over the next 10 years, or enough to refund about one-third of what the sequester will slash from the federal budget. Its also enough to put many air traffic controllers back to work, Head Start teachers back in preschools, and crucial government programs back in business.
As the saying goes, Nothing can resist an idea whose time has come.
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http://www.washingtonpost.com/opinions/katrina-vanden-heuvel-its-time-to-tax-financial-transactions/2013/03/04/d496d738-8516-11e2-98a3-b3db6b9ac586_story.html
By Adam Hersh and Jennifer Erickson
It has been more than 70 years since John Maynard Keynes wrote about the value of a financial transaction tax in mitigating the predominance of speculation over enterprise in the United States. A financial transaction tax works by levying a miniscule fee on the estimated $2.9 trillion of daily financial activity through the trading of stocks, bonds, and derivatives in U.S. financial markets, based on our analysis. The tiny tax makes some of the most speculative unproductive trading unprofitable, thus steadying markets and promoting real investment while raising much-needed revenues. Though many countries around the world already have a financial transaction tax in place, the United States does not yet levy such a fee on trading...Below are five reasons why the world is catching on to the financial transaction tax as a smart policy tool.
A financial transaction tax would bring in much-needed revenue
The U.S. government is currently operating at its lowest level of revenues in more than 60 years....Even a tiny financial transaction tax would raise tens of billions of dollars in much-needed revenue. A tax applied at a very low ratefor example, a 0.117 percent tax on stocks and stock-options trading, a 0.002 percent tax for bonds, and a 0.005 percent tax for futures, swaps, and other derivatives tradingwould raise an estimated $50 billion a year, according to our calculations. To put that amount into perspective, $50 billion in essence pays for all of Americas veterans health services, which ran to $50.6 billion in 2012. Historical evidence and economic theory show that financial transaction taxes have the potential to raise substantial revenues without impeding the function of capital markets. By keeping constant the relative transaction costs of trading in different markets, a financial transaction tax can raise revenues without distorting market behavior.
Business and civic leaders support a financial transaction tax
The idea of a financial transaction tax isnt new, but the chorus singing its praises is growing every dayfrom leading economists such as Nobel Prize winners Joseph Stiglitz and Paul Krugman to entrepreneurs such as Bill Gates and Marc Cuban, to financial leaders the likes of John Bogle, founder of the mutual-fund giant Vanguard Group. The financial transaction tax also has the support of unions for nurses and other health care professionals and service-sector workers.
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A financial transaction tax helps stabilize volatile financial markets
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A financial transaction tax incentivizes investment for real growth
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Many countries already have a financial transaction tax
The standard stalling tactic for bringing a financial transaction tax to the United States is saying that we should wait until other countries do it first. But financial transaction taxes already operate in at least 23 countries around the worldincluding in international financial centers such as the United Kingdom, Switzerland, Hong Kong, and Japanand that number is about to grow.
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http://www.americanprogress.org/issues/economy/news/2013/02/25/54503/5-reasons-the-world-is-catching-on-to-the-financial-transaction-tax/
Originally posted here: http://www.democraticunderground.com/10022466339
daleanime
(17,796 posts)nyabingi
(1,145 posts)up to around 5%.
It's time something tangible is done to benefit the real workers of the world and it's past time to require the wealthiest to pay their share.