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PostPosted: Wed Feb 12, 2014 2:04 pm 
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So, perusing some of the archives in the Economics blogs I browse during my lunch breaks, I came across this little gem that was actually written about 18 months ago:

http://simonthorpesideas.blogspot.fr/20 ... hly-3.html

Allow me to explain:

The Bank of International Settlements (BIS), based in Basle, Switzerland, functions as a sort of clearing house for most of the World’s major economies’ Central Banks.

Amongst other things, it sets the guidelines that cover the practice of
Fractional Reserve Banking; which is where banks are supposed to retain reserves in an amount equal to only a portion of the amount of its customers’ deposits, to satisfy potential demands for withdrawals.

One of the other things that the BIS does is keep track of all the financial trades that take place within the International Finance Industry; and publishes an annual report on those trades.

The blog piece I found today references the BIS’ 2011 report on “Statistics on payment, clearing and settlement systems”. This is a report that details the amount of money used in financial transactions throughout the year (in this case, in 2011).

Looking at the section of the report corresponding to financial trades within the United States, it reports that the total value of all financial transactions in the United States in 2011 was:

US$2,981,926,000,000,000

Or as near to US$3 quadrillion as makes no difference - this is actually down from the 2008 peak of nearly US$3.5 quadrillion.

Now at this point, it appears that the blogger gets his maths a bit wrong, because he’s shy a zero. He notes, “…that the $3 quadrillion number is also roughly 20 times the entire US Government’s national debt (currently standing at around $15 trillion)…”.

What he should have written is that the $3 quadrillion number is roughly *200* times the entire U.S. Government’s $15 trillion national debt. This he later corrects after his error is pointed out in the comments below his post.

Anyhoo, he does get his zero’s right when he talks about the $3 quadrillion being about 1200 times the amount collected as total tax revenue by the U.S. Federal Government (which is roughly $2.5 trillion, give or take).

What he then proposes – and references an excellent website: http://thetransactiontax.org/ - is that if a “Financial Transaction Tax” of just 0.1% was levied on the $3 quadrillion moving around the U.S. Economy each year, this would raise in taxation, a figure of:

$3 trillion dollars.

Which is half-a-trillion dollars *MORE* than the entire Federal Government’s annual tax take.

And *THAT* would mean that the implementation of a Financial Transaction Tax (of 0.1%) would eliminate the need for *ANY AND ALL* other forms of Federal Taxation.

Make the Financial Transaction Tax 0.2%, and in addition to eliminating all other forms of Federal Taxation, it would *ALSO* completely pay off the U.S. National Debt in five years.

Now I’ve had a good think about his (and Andrew Van Hook’s) proposal (and it is just as applicable to the UK and European Economies), and I can’t come up with any faults.

Can anyone else?

:-??

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PostPosted: Wed Feb 12, 2014 3:13 pm 
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Didn't we already fight each other over a transaction tax (stamp tax)?
Seriously though, being in the same vein as a flat tax, even more efficiently handled by a central global clearing house, albeit in Basel, I find the idea attractive. It is regressive though, which will invite massive opposition from the ne'er-do-wells.
Oh, and BTW, welcome to the Tea Party. Fuckin' racist.

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PostPosted: Wed Feb 12, 2014 3:59 pm 
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Actually, it's not a regressive tax, it's actually inherently progressive because wealthier individuals and organisations conduct progressively more and larger transactions, the wealthier they get.

But it *IS* a flat-tax: everyone pays the same percentage rate on transactions, no matter how much money they earn or own. So there's no disincentive towards wealth creation or enrichment.

Furthermore, it comes with an almost negligible bureaucracy overhead, since the Banking System will handle all of the deductions at the point of transaction, just as it does with debit- and credit-card fees.

And yes, I'm well aware of the sympatico with the ideals of the Tea Party Movement.

Just as with the UK Independence Party, those within the Movements do actually share a lot of common ground with those on the outside. Trim away the swivel-eyed lunatics who patrol the fringes of these Movements, and they would get a *LOT* more support from a large majority of Citizens who are just as opposed to the inefficiencies and corruptions of the political status quo.

:>_

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PostPosted: Wed Feb 12, 2014 4:07 pm 
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fractional reserve banking hasnt been reality for probably centuries. it's a myth. each nation's central bank (or the ecb if ur a euroslave) sets the mandatory reserve requirement for its nations banking system. for virtually every country these days there is no reserve requirement. only usa still technically has one but in practical terms it is meaningless and has no influence on anything because american banks dont monitor their reserves according to regulations; they monitor it according to their consumer's projected demands for reserves (cash); they keep enough to satisfy that and no more

reserves in aus are called esf's that is exchange settlement funds and it's a much better term than reserves because it describes the sole function of reserves today, both electronic and hard cash: it's simply a convenient medium for banks to settle their transactions with one another. like gold used to be used back in the day. but the central bank can always ensure an adequate supply of esf for banks to settle their daily transactions, unlike with gold.

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Alaskan Viking wrote:
Trump is going to lose to Hillary in a landslide, he is literally the only candidate who could have lost to her, we will have 4-8 more years of lefty insanity, possible lose the congress, and have a liberal dominated supreme court for a generation.

And I fucking blame you fuckwits who voted for Trump in the primary, classic low information voter.

We need pull taxes, to cull the opinions of DINDU's and inbred Trump supporters. >>::$


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PostPosted: Wed Feb 12, 2014 4:13 pm 
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Define "transactions" for the purpose of this proposal Holyman. If it means paying a tax on shifting money from my savings to my checking to avoid a check bouncing then you're never gonna pass it as it's going to cause untold problems.

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PostPosted: Wed Feb 12, 2014 4:14 pm 
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and fucks sake taxation doesnt exist to raise revenue. it exists to decrease private spending (production) in the economy, to free that spending (production) up for government spending (production)... assuming of course the economy is operating at max productive capacity ie no slack. this proposed tax on financial transactions wouldnt be the best way to do that, because ur just subtracting fractions of electronic 1s and 0s mostly from trades by big banks and their traders who are just shifting digits around cyberspace not actually spending on production. well eventually some or most of it might enter the economy as spending on actual production but thatd be down the track

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Alaskan Viking wrote:
Trump is going to lose to Hillary in a landslide, he is literally the only candidate who could have lost to her, we will have 4-8 more years of lefty insanity, possible lose the congress, and have a liberal dominated supreme court for a generation.

And I fucking blame you fuckwits who voted for Trump in the primary, classic low information voter.

We need pull taxes, to cull the opinions of DINDU's and inbred Trump supporters. >>::$


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PostPosted: Wed Feb 12, 2014 4:16 pm 
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SomeGuy wrote:
Define "transactions" for the purpose of this proposal Holyman. If it means paying a tax on shifting money from my savings to my checking to avoid a check bouncing then you're never gonna pass it as it's going to cause untold problems.


it'd be a tax on when banks settle billion dollar amounts with each other. when u send money to another bank your bank will settle it next morning and it would come under this tax. not within the same bank tho. nub

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Alaskan Viking wrote:
Trump is going to lose to Hillary in a landslide, he is literally the only candidate who could have lost to her, we will have 4-8 more years of lefty insanity, possible lose the congress, and have a liberal dominated supreme court for a generation.

And I fucking blame you fuckwits who voted for Trump in the primary, classic low information voter.

We need pull taxes, to cull the opinions of DINDU's and inbred Trump supporters. >>::$


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PostPosted: Wed Feb 12, 2014 4:19 pm 
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so actually, contrary to what i said b4, itd be a mini consumption tax on everyone, and an investment tax on firms too whenever they purchase shit. how efficiently it would dampen spending ud have to see

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Alaskan Viking wrote:
Trump is going to lose to Hillary in a landslide, he is literally the only candidate who could have lost to her, we will have 4-8 more years of lefty insanity, possible lose the congress, and have a liberal dominated supreme court for a generation.

And I fucking blame you fuckwits who voted for Trump in the primary, classic low information voter.

We need pull taxes, to cull the opinions of DINDU's and inbred Trump supporters. >>::$


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PostPosted: Wed Feb 12, 2014 4:19 pm 
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banks would pass on the cost of the tax to everyone, im assuming u understand

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Alaskan Viking wrote:
Trump is going to lose to Hillary in a landslide, he is literally the only candidate who could have lost to her, we will have 4-8 more years of lefty insanity, possible lose the congress, and have a liberal dominated supreme court for a generation.

And I fucking blame you fuckwits who voted for Trump in the primary, classic low information voter.

We need pull taxes, to cull the opinions of DINDU's and inbred Trump supporters. >>::$


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PostPosted: Wed Feb 12, 2014 4:50 pm 
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SomeGuy wrote:
Define "transactions" for the purpose of this proposal Holyman. If it means paying a tax on shifting money from my savings to my checking to avoid a check bouncing then you're never gonna pass it as it's going to cause untold problems.


No. That wouldn't be taxed SG - that's a transfer, not a transaction.

A transaction in the financial sense is when money changes hands between two parties.

Pay a shop-owner for your weekly groceries: that's a financial transaction and would be taxed. Purchase a new car from a dealership: that's a financial transaction and would be taxed. Buy a new home from someone else: that's a financial transaction and would be taxed.

Purchase 10m shares in a new IPO: that's a financial transaction and would be taxed. Purchase a large bundle of Treasury Bonds from the Government: that's a financial transaction and would be taxed. Buy a large stake in an Internet Start-up company: that's a financial transaction and would be taxed.

Sounds horribly expansive, doesn't it?

Thing is, you've got to remember that:

a) We're talking about a tax rate of between 0.1% and 0.4% at most.

b) And we're only talking about doing this at the *SAME TIME* as all other forms of taxation - Income Tax, Capital Gains Tax, Inheritance Tax &c. - are abolished.

If you visit that site I linked to - http://thetransactiontax.org/ - it gives the following illustrations at 0.35% Financial Transaction Tax-rate:

Individual earning $37,000 p.a.

Spends: $32,000

Currently pays: $6,400 in Federal tax

Would only pay: $241 in Transaction tax

Benefits to the tune of: $6,159 p.a.

Individual earning $1,438,000 p.a.

Spends: $1,322,000

Currently pays: $360,160 in Federal tax

Would only pay: $9,660 in Transaction tax

Benefits to the tune of: $350,500 p.a.

Business with annual revenue of $124.8 billion

Costs: $105 billion

Corporate Tax: $6.2 billion

Transaction Tax: $804 million

Benefits to the tune of: $5.396 billion per year.

Business with annual revenue of $920 million

Costs: $640 million

Corporate Tax: $28 million

Transaction Tax: $5.5 million

Benefits to the tune of: $22.5 million per year.

...

And bear in mind also that this is at the rate of 0.35%, which at the current level of financial transactions is enough to cover the entire Federal budget as it stands, without any cuts, *AND* with about a $500 billion surplus.

The Federal Government spends $200 billion a year *COLLECTING* taxes, processing tax returns, chasing up and prosecuting late-payers etc., the elimination of this spend would along with the surplus above, could well mean a Financial Transaction Tax lower than 0.35% - certainly no higher.

It really is a no-brainer, as far as I can tell.

:-??

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PostPosted: Wed Feb 12, 2014 4:54 pm 
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Holyman wrote:
sfer, not a transaction.

A transaction in the financial sense is when money changes hands between two parties.

Pay a shop-owner for your weekly groceries: that's a financial transaction and would be taxed. Purchase a new car from a dealership: that's a financial transaction and would be taxed. Buy a new home from someone else: that's a financial transaction and would be taxed.

Purchase 10m shares in a new IPO: that's a financial transaction and would be taxed. Purchase a large bundle of Treasury Bonds from the Government: that's a financial transaction and would be taxed. Buy a large stake in an Internet Start-up company: that's a financial transaction and would be taxed.


Thank you for clearing that up.

Holyman wrote:
It really is a no-brainer, as far as I can tell.


It sounds actually pretty good in theory but my big concern is I think the politicians will fuck it up.

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PostPosted: Wed Feb 12, 2014 4:57 pm 
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Hoff wrote:
banks would pass on the cost of the tax to everyone, im assuming u understand


The banks (and retailers, house-sellers, car-dealers et al) will pass on the cost of the tax to everyone who is no longer paying income tax, capital gains tax, inheritance tax, and by and large, any Value Added/Sales tax.

I'm sure under those circumstances, it would be a price everyone would be willing to pay.

:>_

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PostPosted: Wed Feb 12, 2014 5:01 pm 
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SomeGuy wrote:
It sounds actually pretty good in theory but my big concern is I think the politicians will fuck it up.


Yet another advantage to the Financial Transaction Tax (FTT) System:

No political involvement.

The same Banking System that handles money transfers and exchanges between individuals and organisations would handle and process the FTT.

The cost of FTT would be added at the point of the transaction, collected by the banks, and forwarded to the Treasury/Government. End of Story.

Politicians wouldn't be responsible for setting the various rates of tax for the various forms of taxation that exist today. There would be no tax-avoidance schemes; no need for complex tax-returns; no need for accountants, come to that!

The politicians would be solely responsible for fucking up the way the tax revenue is spent: not fucking up how it is gathered.

:D

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PostPosted: Wed Feb 12, 2014 5:09 pm 
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Hoff wrote:
so actually, contrary to what i said b4, itd be a mini consumption tax on everyone, and an investment tax on firms too whenever they purchase shit. how efficiently it would dampen spending ud have to see


The elimination of Capital Gains Tax would off-set any dampening effect on spending.

As would the substantial increase in consumer spending, as the elimination of income tax would give consumers more money to spend; and the elimination of VAT/Sales taxes would also make all consumer goods cheaper to purchase.

It would also encourage investment at the expense of speculation, because investors would be more inclined to keep their money invested for a longer term, to avoid the FTT.

Still all good as far as I can tell.

:-bd

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PostPosted: Wed Feb 12, 2014 6:45 pm 
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There are more taxes than just federal taxes, so there would need to be additional taxes to pay States, counties, etc.
If the transaction is between parties in different jurisdictions, who would get a cut?
Does the estimate above include government initiated transactions (because government doesn't pay taxes)?


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PostPosted: Wed Feb 12, 2014 8:37 pm 
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XERXES_II wrote:
There are more taxes than just federal taxes, so there would need to be additional taxes to pay States, counties, etc.


So, the illustration that the guy uses on his website (that I've discovered since is based on an idea propounded by a Professor of Economics, which is starting to gain traction), proposes a Financial Transaction Tax (FTT) rate of 0.35% on a $500 trillion volume of financial transactions in one year, to raise the same amount of money in Federal taxes raised in a single year from Income Tax, Corporate Tax, Capital Gains Tax etc.

The $500 trillion figure is 1/6th of the figure recorded by the Bank of International Settlements for 2011; but the guy cites $500 trillion in order to offset any concerns that he might be over-estimating and to take account of any fluctuations and shifts away from financial transactions as a result of the implementation of the FTT.

Those then are the figures used to illustrate the viability and obvious benefits of switching Federal taxes from taxation on earnings to taxation on transactions; and the 0.35% rate is a minuscule rate compared to the rates used for income and corporate taxes.

One would assume then that the rates for Financial Transaction Tax at State and county level would be lower. Even if we said 0.2% for State and 0.1% for county taxes (and I suspect that's way more than necessary), we'd still be looking at an overall FTT of 0.65% - still way below the other rates of taxation we currently pay, and indeed, much lower than existing Sales taxes, which currently contribute a fair chunk to State and local government coffers.

XERXES_II wrote:
If the transaction is between parties in different jurisdictions, who would get a cut?


The tax would only be applied at one side of the transaction, and I guess logically that would be at the side making the payment, rather than the side receiving it. So the revenue would go to the jurisdiction where the money is being spent.

Unlike other forms of taxation, there would be no deductibility. The tax gets paid on the value of the transaction, at the point at which the transaction is made. It wouldn't be deferred or avoided.

If person 1 pays person 2 $1000, person 1 pays $3.50 FTT. If person 2 then pays that money onto person 3, person 2 pays $3.50 FTT. Every time the money changes hands, the FTT is due.

It might be observed that people and corporations might go out of their way to avoid or conceal financial transactions in order to avoid paying the FTT. But I think that is because the *CURRENT* systems and rates of taxation are so incomprehensible and seem so unfair to most, that the automatic instinct is to think of ways to avoid paying tax. But since the rate of FTT is so low, its method of collection so transparent, and its application so inherently unavoidable, that I really don't see anyone bothering.

There's a big difference between trying to avoid or reduce having to pay a 40% overall tax rate; and jumping through hoops and perhaps behaving illegally, just to avoid paying a 0.35% (or even a 0.6%) tax rate.

XERXES_II wrote:
Does the estimate above include government initiated transactions (because government doesn't pay taxes)?


The illustration on the FTT website doesn't give a breakdown of where the transactions that make up the $500 trillion comes from.

But the Bank of International Settlements' 2011 figure of US$2.9 quadrillion gives a figure of just about $310 trillion (around 10% of the total) as transactions from or related to the Federal Reserve.

As it goes, the bulk of the $3 quadrillion transactions is recorded is the around $2 quadrillion that is recorded against the CHIPS, FedWire and Fixed Income Clearing Corporation transfer systems. And the bulk of these transactions will be trades within the Financial Markets.

:>_

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PostPosted: Thu Feb 13, 2014 3:33 am 
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The problem I have with the whole scheme of coming up with a better way to tax - even if it made more money than the current system of taxation - is that governments would just find a way to spend the additional revenue coming to them. it gives them no incentive to economize, which is the primary problem we have with governments now. As long as we have a sizeable segment of the population who are totally resistant to efficient government, because it's in their financial interest to continue to feed at the government trough, this problem will remain. as it's been said before: our problem is not revenue, it's spending.

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PostPosted: Thu Feb 13, 2014 5:19 am 
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ClayMoore wrote:
The problem I have with the whole scheme of coming up with a better way to tax - even if it made more money than the current system of taxation - is that governments would just find a way to spend the additional revenue coming to them. it gives them no incentive to economize, which is the primary problem we have with governments now. As long as we have a sizeable segment of the population who are totally resistant to efficient government, because it's in their financial interest to continue to feed at the government trough, this problem will remain. as it's been said before: our problem is not revenue, it's spending.


That's where if I were to propose this thing you tie it to a balanced budget bill or amendment. Either you demand balanced budgets or you don't allow the massive cash influx this will bring. It's not one or the other.

Make the teat-suckers defend themselves and their idiocy in the open.

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PostPosted: Thu Feb 13, 2014 10:37 am 
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ClayMoore wrote:
The problem I have with the whole scheme of coming up with a better way to tax - even if it made more money than the current system of taxation - is that governments would just find a way to spend the additional revenue coming to them. it gives them no incentive to economize, which is the primary problem we have with governments now. As long as we have a sizeable segment of the population who are totally resistant to efficient government, because it's in their financial interest to continue to feed at the government trough, this problem will remain. as it's been said before: our problem is not revenue, it's spending.


Aye, there’s the rub.

There are actually two different – and I think separate – components to the dynamic:

1) How is money raised by Government/Society?

2) And how is that money spent?

Whilst the proposition of the Financial Transaction Tax addresses the first part, it obviously doesn’t – and can’t – address the second.

But I do think that has to be dealt with as a separate issue.

Actually, the main benefit of the Financial Transaction Tax, is not that it would, could or should raise more money than current systems of taxation; but that it is a much simpler, more equitable and less morally and politically questionable form of taxation.

Because of the way that our current taxation systems have developed, they have become all but completely incomprehensible to most people. In addition to the $200 billion that it costs the U.S. Internal Revenue Service to collect Federal Taxes, there is also a $500 billion Accountancy Economy. That’s an additional half-trillion dollars’ worth of business devoted to navigating the complexities of the tax system.

And again, it’s the same all over the Developed World, I’m just using the U.S. as the largest and most obvious example for demonstration purposes.

I pay my accountants a little over £2, 500 a year. But in return for this, they save me about £15,000 a year in taxes, by helping me to make use of the various loop-holes that are legally available to me. So I end the year up on the deal.

But that’s obviously not an option for a lot of people, particularly those whose sole form of income arrives in the form of a wage or salary envelope.

Scrap it all and replace it with the Financial Transaction Tax, and suddenly, everyone is on a level playing field.

*AND*, it would appear, perhaps because of that levelling of the playing field, it also raises more money for Society/Government.

Perhaps there *IS* a link between the incomprehensibility of our present taxation systems, and the opaque, over-bureaucratised and equally incomprehensible way in which governments spend the money raised from those taxes.

Perhaps if people aren’t so distracted (and disaffected) by having to try and understand how and why so much money is being taken from their wage/salary packets, they would have more time to concentrate on just how, exactly, their governments are spending the money that is raised.

I agree with you 100% about the wastefulness and profligacy of Government spending. I have first-hand experience of the inefficiencies and waste in Public Sector spending. To be honest, in all my years of political debate and dialogue, I don’t think I’ve ever encountered anyone who has a good word to say about the way in which governments spend the money raised in taxes.

But perhaps the reason why so few people have any energy left to challenge and press for change in the way that governments spend money, is because they are too exhausted by having to work so hard to increase their own net incomes.

Make the change so that the difference between our gross and net incomes falls below 1% (as with the proposed rate for FTT), and paradoxically, people may just start applying much greater scrutiny to how their elected leaders spend that money!

:>_

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PostPosted: Sat Feb 15, 2014 3:45 am 
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Nice idea ... won't happen. All that shortfall from me paying less has to come from somewhere and I'm guessing from my quick skim that it'll come from the banks...who own the governments. Much cheaper for them to buy the government than to pay that much in tax.

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PostPosted: Mon Feb 17, 2014 10:35 am 
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Yup.

I’ve been digging around the InterWeb since I first came across the idea of this Financial Transaction Tax, and there is much more information about it than I anticipated.

Starting at the Wikipedia Page for it:

It seems that the “Financial Transaction Tax” (FTT) goes under many different names, but (as I think someone mentioned earlier in this thread) its earliest incarnation was in 17th Century England when it was known as “Stamp Duty”.

That is: the tax that needed to be paid *BY THE BUYER* of shares, for “…the official stamp on the legal document needed to formalise the purchase.”

Hold that thought.

Next up, John Maynard Keynes (the person occasionally described as the Einstein of Economics), promoted the wider use of financial transaction taxes in order to reduce the excessive speculation that had brought about the Wall Street Cash.

And then, in 1972, when the Bretton Woods System that had been regulating international finance since 1944 came to an end, a Nobel Prize-winning American Economist called James Tobin reiterated the desirability of an FTT, and this became the idea known as “The Tobin Tax”.

Crucially though, from the time of England’s “Stamp Duty”, and through Keynes’ and Tobin’s recommendations for an FTT, it was never proposed as a universal tax on *ALL* financial transactions, because the technology to effectively tax all financial transactions did not exist. So at each point in History when it was proposed, it was never proposed as a catch-all tax to replace all other forms of taxation.

Things are different now though.

Financial transactions – at least within OECD nations – are increasingly carried out electronically, rather than by using cash. It has been estimated that cash withdrawn from bank accounts circulates approximately 2.5 times before it is re-deposited; but where cash is still used, it is used for increasingly smaller transactions. Anti-Money Laundering Regulations also generally requires that deposits above a certain amount (e.g. $10,000/£10,000) are notified to regulatory authorities in the jurisdiction in which they are made.

The overwhelming bulk of Financial Transactions are within the Finance Sector, and these are, almost without exception, managed electronically.

The ability to track and monitor financial transactions in the second decade of the 21st Century is far greater than at any previous point in History, and it is a dynamic that is only going to further increase. The technological advancements around “e-Wallets” and Near-Field Communications (NFC) in smart-phones, increasingly means that cash is becoming an anachronism.

So, the practical limitations on being able to apply and collect a Financial Transaction Tax are evaporating. So what is preventing governments from implementing an FTT to replace all other forms of taxation?

Well, as it happens, Financial Transaction Taxes *HAVE* been introduced in various nations around the World already; in 2011, there were 40 countries that had FTT in operation, raising $38 billion.

In most of these countries however, the scope of the FTT has been limited to financial instruments. That is: FTT’s purely on institutional financial trading. Only in Colombia has the government tried implementing the FTT across nearly all forms of financial transactions.

It seems then that the major opposition to a Financial Transaction Tax comes from Finance Sector institutions (naturally…); but this can largely be put down to the fact that wherever an FTT has been proposed or implemented, it has been presented as an *ADDITIONAL* tax, to be levied *JUST* on institutional financial transactions.

And naturally and obviously, the same financial institutions that carry a disproportionate influence over our “democratic” governments have opposed this.

But there *IS* an increasing groundswell of support for the FTT/”Tobin Tax”/”Robin Hood Tax”. It is just that only very recently has the debate begun to shift towards a universal FTT on *ALL* transactions, as the *SOLE* form of taxation.

As it goes, the largest organisations spend vast sums of money employing accountants to figure out how best to shuffle money around the Globe in order to minimise (or eliminate completely) the amount of corporate taxes those organisations have to pay. At the same time, these same organisations are having to fight a rear-guard battle on the field of Public Opinion, when it is brought to light just how little tax these organisations pay, as a percentage of their massive profits.

A universal Financial Transaction Tax is not only much easier for these organisations to administer (and for governments to collect), it is also much more equitable and unavoidable.

It would/will completely alter the landscape of Capitalist-Democratic Society, in a way that it is very difficult for anyone of any political persuasion to object to.

Private citizens and commercial organisations will *ONLY* pay a miniscule (less than 1% tax) on money that they spend: they will pay no tax on anything that they earn. This ticks all of the boxes that Economic and Social Conservatives hold dear.

It is a form of taxation that is completely unavoidable. It is not “Progressive Taxation” in the sense that the more you earn, the more you pay; but nor is it a regressive form of taxation either, in the sense that the more you earn, the less you pay. It *IS* progressive in the sense that the more you *SPEND*, the more gross tax you will pay; but the rate at which you pay the FTT remains the same, no matter if you are spending $10k a year, or $10m.

And this is the best that those of a Socialist persuasion are likely to get, unless they can come up with a truly viable alternative to Capitalism.

I think that the main obstacle to the take-up of a universal Financial Transaction Tax today is simply that not enough people have got their heads around what it means, and that only if they have even heard of the idea of a universal Financial Transaction Tax.

The FTT *IS* a far more simpler and equitable form of taxation, with no down-sides that I (and many others) can see. But even if there are any as-yet-un-noticed negatives to a Universal FTT; it is hard to imagine that they would or could be any worse than the current, multi-layered, largely-incomprehensible, mostly inequitable, and frequently avoidable (to those who can afford to avoid them) forms of taxation currently in use.

All that needs doing now then, is for The Word About FTT, to be spread as far and as wide as possible.

:>_

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PostPosted: Tue Feb 18, 2014 8:42 am 
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I haven't looked into this thoroughly yet, so it wouldn't surprise me if there was a catch or a miscalculation (3 quadrillion seems a little high) that the proponents of this idea are not disclosing. But on first glance, this looks fantastic. A way to balance the federal budget AND implement a flat tax? Sign me up.

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PostPosted: Tue Feb 18, 2014 10:13 am 
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The most recent figures I can lay my hands on are for 2012, from the Bank for International Settlements (BIS).

This is the report that details all financial transactions originating from, terminating at, moving between, or being managed by banks.

The chap who writes the blog that I originally stumbled across has totalled up all of the various transactions cited within the BIS report, to produce this table:

Image

Actually, the most stunning thing about that table (to a Brit anyway), is the value of transactions in the UK Economy over the years 2007 - 2012.

Whereas the value of transactions for the U.S., Germany, Japan, Hong Kong and Singapore (nations with major global financial trading centres) is fairly consistent across those years; for the U.K. (read: London) there is a precipitous decline.

But even at that low ebb (for the U.K.), a 1% (for ease of maths) FTT (to replace *ALL OTHER* forms of taxation) would raise around £3 trillion ($4.66 trillion): which is approximately 2 years G.D.P. for the U.K.; or approximately *SIX TIMES* the amount of tax revenue currently being raised by the U.K. Government.

Drop the FTT rate then to the figure of 0.35% that is used at The Transaction Tax Website, and we are still talking about the U.K. Government raising *DOUBLE* the amount of tax it currently does - even though times is 'ard.

Now tot up the total for just the top 22 countries listed (plus "EU" representing all other E.U. countries not mentioned separately), and we are talking about a combined volume of financial transactions in 2012 of nearly $9 quadrillion.

A Financial Transaction Tax at the highest imaginable rate of 1% on that lot, would raise a combined $90 trillion: which coincidentally, is almost exactly the same as Gross World Product (GWP - combined total of all countries' GDP) for 2012, which was $85 trillion.

And all this with all other forms of taxation eliminated!

:D

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PostPosted: Wed Feb 26, 2014 12:10 pm 
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More on the FTT then:

Apparently the International Monetary Fund is all in favour of it: https://www.imf.org/external/np/g20/pdf/062710b.pdf

And there is a bill currently going through the U.S. Congress to implement an FTT on Wall Street Trading and Speculation: http://thomas.loc.gov/cgi-bin/query/z?c113:S.410:

There's hope yet then.

:D

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PostPosted: Wed Jul 26, 2017 2:15 pm 
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Labour alarms bankers with Robin Hood tax

LONDON (Reuters) - Britain's left-wing opposition party has held a series of meetings with top finance executives, setting out how it would levy taxes on one of the world's biggest financial trading centres if it snatched power from Prime Minister Theresa May.

With May's grip on the leadership weakened by an ill-judged election last month and her Conservative party divided over Brexit, Labour is hoping her minority government will collapse and catapult its socialist leader Jeremy Corbyn into power.

Last week, Labour's finance spokesman John McDonnell chose the London Stock Exchange -- a bastion of British capitalism -- to invite feedback on proposals, telling leaders his party will form the next government, sources at the meeting said.

Banks in London's financial hub had paid little attention to relations with the Labour Party since 2015 when members elected Corbyn, a veteran campaigner who is seen as opposing much of what the City of London stands for.

But the industry has been forced to take the party seriously after its much stronger than expected showing in the general election which left May to rely on the support of a small Northern Irish party to prop up her government.

McDonnell told executives from Standard Chartered, the London Stock Exchange, the City of London Corporation, lawyers, lobbyists and accountants in two separate meetings last week about Labour's proposals to expand an existing tax on shares to include trading on other assets such as bonds and derivatives.

Labour says the tax -- proposed to be around half of a percentage point or less on the value of a trade -- could earn 4.7 billion pounds a year.

Labour published details of the tax in the run up to the June election.

Banking industry figures are concerned such a tax, debated in Western economies for decades, could exacerbate the impact of Brexit by prompting more businesses to flee London.

Labour alarms bankers with Robin Hood tax

:-"

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