I honestly believe the transaction tax is dead with this new bank tax. This new direct tax on the banks makes much more sense than the TT (and the powers that be understand this). They also understand that a TT would be very destructive. I would be surprised if the TT bills even come up for a vote. I say they die out quietly in committee (especially when the IMF comes out with it's report not in favor of the tobin tax). -Guru
I agree. We all know a "pound of flesh" was going to be taken from somewhere, lucky for us the direction is away from the STT. We are in the clear for now, but this thing will pop up again. We need to stay on top of this.
This LA Times "article" is nonsense. They're just trying to put a spin on a bunch of random links by giving it a provocative title.
I wanted to relax yesterday and toast our apparent victory but then got several new FTT story links in Google alerts on FTT. As expected, the EU FTT proponents had to react to the US administration's budget plan and explain how it's not a good idea for their countries. France said it would do what it promised to follow the UK banker bonus tax. That's good news. Can France also then propose a FTT? Yes since a FTT would fund a different purpose - global health, poverty and climate. Hopefully not. We all are hoping it's one or the other and Geithner chose the bank tax. That seems safe for now in the US. But the media will remain confused and still give a soap box to the hard core FTT activists. We need to keep up our efforts to still comment on all articles. Compare FTT to the bank tax. FTT 25-basis points on every buy and sell transaction versus just 15-basis points on total non-insured liabilities just once a year with the bank tax. A bank could turnover their assets 1 to thousands of times per year. Millions on fast trading. No one ever suggested in any FTT bill that banks would be exempt on FTT. Even if they were that exemption would not be on trading positions. Banks and traders both won reprieve here. From iPhone
PS, if traders had to choose a bank tax or FTT, they could afford 15-basis points on debt-financed capital with a bank tax. Plus they pay margin interest rates to banks who themselves get zero interest rates.
Next thing you know some congressman proposes the FFT that has to be paid by small traders because big banks are already burdened by bank tax and should be exempt. No, small traders have to be in the same boat with the big banks. Otherwise each group will be conquered one by one.
"Quote from zdreg: divide and conquer works every time. in your scenario it will be your turn to pay the piper. disgusting attitude. " _______ quote from gkishot "Next thing you know some congressman proposes the FFT that has to be paid by small traders because big banks are already burdened by bank tax and should be exempt. No, small traders have to be in the same boat with the big banks. Otherwise each group will be conquered one by one." I am glad someone else figured out the situation unlike TraDaToR and other members of tax the other guy crowd. any tax on some members of the financial community will eventually ensnare other members of the financial community particularly public traders ie day traders etc.
Secretary Geithner has repeated often that he does not support a FTT. President Obama has sacrificed the banker tax to assuage populist forces. He now must deal with Repulicans stating he is a tax and spender. I think their bank tax is it for 2010 and the rest of his administratio hopefully with Geithner at the Treasury helm. Health tax plus bank tax and union tax breaks. They have used all their political tax capital in my view. The Euros admit they have a different situation and I think we are safe on the FTT in the US. But not free of continued arguments for a FTT in the world media. Next up, table both FTT bills in the House and Senate. That all should happen with final health care and the budget by Feb. We will never fly the mission acomplished flag. But we will survive. We are reaching a tax tipping point for causing damage to the economy and Dem's chances to rule. In fact the super majority is soon to be history and Republicans may be able to fix some of the Dem excesses.
Hope for sun but prepare for rain. Obama and Geithner are not trustworthy and can easily buckle under political pressure.
..which is rather likely, given that the Managing Director of the IMF, Dominique Strauss-Kahn, has just "welcomed a proposal by U.S. President Barack Obama that major U.S. financial firms pay a fee to help the government recover losses from the financial crisis, saying this showed that the worldâs biggest economy was prepared to follow up although the crisis was receding, adding that "Regulation and financial sector supervision needed to be not just stronger but smarter. The aim was not to impose additional layers of regulation." ( http://www.imf.org/external/pubs/ft/survey/so/2010/NEW011410A.htm ) and especially given the views expressed by Strauss-Kahn's deputy, John Lipsky (who leads the group preparing the report for G20 on how to pay for financial sector rescues), in his January 11th interview for the IMF Survey online:. "eventual policy decisions in this area will involve judgments about fairness and efficiencyâissues that inherently are difficult and often contentious." "before we look to use the tax system to fund crisis resolution, we need to ask whether current tax rules favor excessive risk-taking, and if so, how such problems could be corrected." "Of course we will examine all worthwhile proposals. However, the original âTobin taxâ proposalâfirst suggested by the late Nobel laureate James Tobinâwas limited to foreign exchange transactions, and was intended to reduce the volume of such transactions, not to raise revenue. [..] Whatever the merits of this approach, and the worthiness of the overall goal, this is not exactly the issue that the G-20 Leaders asked us to analyze." Source: "IMF Studies How to Pay for Financial Sector Rescues", IMF Survey online, January 11, 2010, URL: http://www.imf.org/external/pubs/ft/survey/so/2010/INT011110A.htm Note also that the Obama bank tax seems to have satisfied the blood-thirsty public. While there are still some serious voices claiming that it is not enough (such as former IMF's chief economist, Simon Johnson here: http://baselinescenario.com/2010/01/14/the-obama-financial-tax-is-a-start-not-the-end/ ), the additional measures proposed here are more regulation, not more taxation (we know already from this January 6th BBC interview that prof. Johnson does not recommend the Tobin tax, see http://www.elitetrader.com/vb/showthread.php?s=&postid=2691614&highlight=simon+johnson#post2691614 and PM me or Explorer for the entire interview in mp3 format - guess what happened after we posted in on the http://houndbite.com website... but that's merely post hoc ergo propter hoc, unless you are even more paranoid than myself. The general public appetite for revenge seems to be subsiding thanks to the well-timed pre-bonus Obama tax proposal. Now only the most radicalized minority of 2% or so is calling for Tobin tax on top of Obama tax (judging from the proportion of posters mentioning this trans-tax in a sample of BBC listeners commenting on the question 'Will Obama's tax go global?' posed by the BBC's business editor on his blog here: http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/01/will_obamas_tax_go_global.html ) Some interesting readers opinions from these two blogs: "I think broadening the net to $50 billion in assets down from $100 billion makes it more likely this will stall in the Senate. The $50 to $100 billion banks pose no systemic risk. Perhaps some White House staffers are thinking about their careers at GS⦠Todayâs proposal is a disappointment compared to what was floated earlier. (Linus Wilson, who's impeccable academic... timing can be admired at http://www.tarpwarrants.com ... and from Ian Hosier, a seasoned banking sector worker, who just points out the sheer redundancy of the Obama bank tax (which is good since it placates the pubic hunger - sorry, genuinely Freudian, so I'm leaving it : "(ii) the US banks already fund every cent spent by the FDIC when it is protecting the depositors at failed banks. Last year, the banks not only paid the 'regular' levy to the FDIC, they also paid a once-off additional levy for 2009, as well as a large accelerated payment of the projected FDIC levy for the next 3 years. If all of those prove insufficient, then they will have to pay yet further levies, so that the FDIC is kept sufficiently in funds to cover depositor losses. Although there is Federal credit line to back-stop any temporary shortfall of funds at the FDIC, it has never been used, and - if it ever were used - then the banks would have to pony-up another levy to repay the Fed's credit line. So, the US banking system routinely pays all necessary amounts to protect all depositors at the FDIC-guaranteed banks - a fact usually completely ignored when people are bashing the banks, as Robert [Peston] was in [..]his blog."