HAMMER THE COMMENT SECTION AT THE BOTTOM OF THIS ARTICLE. http://dealbook.nytimes.com/2013/02/06/time-to-revive-the-financial-transaction-tax
If a shopkeeper buys a box of toothpaste to sell, he does not pay sales tax on the purchase of the toothpaste. Why? Because s/he's purchased the toothpaste with the intent to sell it for a profit, and on those profits s/he will pay tax. If the shopkeeper, for some reason, sells it at a loss, s/he pays no tax. My answer to the assertion that an FTT is analogous to a consumer sales tax (something people seem to be terribly confused about): If a consumer buys a tube of toothpaste from the shopkeeper s/he may pay a sales tax because s/he has no intent to sell it for a profit, but to use it. When someone buys a stock, s/he does so with the intent to sell it (there is no other use for a share of a company, really). When s/he does so, and makes a profit, s/he pays a tax on that profit. Just like the shopkeeper. The financial transaction tax would tax losses as well as profits, and this would impose a heavy burden on the financial system...and on every single retirement plan out there. The question, then, is not why financial transaction taxes shouldn't be treated like any other transaction, because they already are. The question is, why should they be treated more harshly than any other kind of transaction, because that's what a financial transaction tax would do. It's a snake-oil remedy. I pray we don't fall for it.
My response to a comment from someone who said: "As I understand it, the tax takes a minuscule amount from each stock sale transaction as a means of putting a tiny brake on Wall Street speculation...": You misunderstand. The tax is not "tiny" at all when you consider the nature of the transactions to be taxed. Consider that profits are already taxed (capital gains). Now you would tax losses as well. The compounding effect of this would be to increase the costs of buying and selling securities by mutual funds, pensions, etc., and significantly reduce the return on investment. Think about this, do we really want to reduce people's retirement savings at a time when the future of social security is in doubt? Furthermore, a financial transaction tax would not put a "brake" on Wall Street speculation; instead, it would drive that speculation to unregulated venues (i.e., off the public exchanges) where it can do real damage (note that the financial crisis of 2008 was triggered, in part, by the reckless trading of financial instruments that were not traded on exchanges and would not be affected by any financial transaction tax under consideration.) Do we really want to drive more financial transactions into the unregulated world of the backrooms? Finally, please note that Robin Hood took from the government to give to the people. This tax would do the opposite.
"Also, the European Union is moving ahead with a financial transactions tax. Such a tax would make the financial sector more efficient by eliminating a huge amount of wasteful transactions. It could also raise a large amount of revenue. Congressââ¬â¢ Joint Tax Committee estimated that the Harkin-DeFazio billââ¬â¢s modest transaction tax, with a 0.03 percent rate, could raise $40 billion a year. Other proposals could raise more. If Lew doesnââ¬â¢t support this efficiency enhancing tax, why not? <http://www.nytimes.com/roomfordebat...es-government-need-to-do-more-for-the-economy>" re: jack lew
Man... Dean Baker just won't let go of this, will he. He's due to begin the CNBC rounds to push this. Notice that this $40 Bill revenue projestion is a far drop from his original $150B claim found in the beginning of this thread.
Robin Hood shows up at Jack Lew's Senate hearing. (hint he's in the back). http://news.yahoo.com/blogs/ticket/...uring-senate-hearing-170855865--politics.html
lots of news this morning US banks warn over planned EU âTobin taxâ http://www.ft.com/cms/s/0/d1b16f7a-7601-11e2-8eb6-00144feabdc0.html#axzz2Ks9YaU8G also, semeta presented the updated draft of the eu ftt. nothing new, no pensionfunds exemption and they want to apply AND a residence principle AND a principle of taxation based on the location where the financial product originates from. this is going to lead to double taxation all the way, for example investors having to pay BOTH UK stamp tax AND FTT. semeta will travel to america next week to discuss with us counterparts, but was very vague about this in general, also on why the hell non-FTT countries would be interested in collecting FTT revenues. Semeta came up with a VAT-example which made no sense. to be continued no doubt.. Q&A about the new proposal: http://europa.eu/rapid/press-release_MEMO-13-98_en.htm
my personal opinion: if anything this proposal, which went even further than the original, is good for us. no compromise whatsoever, no deals under the table, semeta is attacking this head-on and is giving the non-ftt part of the world the finger. now the real fight can begin, especially since the us finally seems to wake up on this issue.