You are correct about 4191. However, 2927 does tax non-governmental debt: maturities of less than 1 year at 0.02% and above this at 0.25%. Currencies are not taxed. Interesting point about his article being self-published. That explains a lot. I doubt it would have survived if it had gone through peer review.
That seems reasonable. It doesn't make sense for him to oppose a bank tax and support the FTT. Thanks for posting the links.
Not sure if this was posted before. There is now a House bill for a 50% tax on bonuses of TARP recipients: ww.opencongress.org/bill/111-h4426/show
Baker never shuts up, although he's now lowered his figure to $100B: http://www.politico.com/news/stories/0110/31676.html
Considering this is a thread against the transaction tax, how do you avoid it? It is no secret what party is pushing this tax. Breaking up their filibuster proof super majority in the Senate is a win for those fighting this tax. However, I agree that other political ideology should be left out of the discussion.
Thank you! Indeed corporates are also taxed. So for currencies we subtract Mr. Baker's estimated revenue of $33.3bn (not questioning the assumed U.S. 1/4 share in that market), and for government bonds, we subtract $27.7bn, giving around $60bn in total, or - after the 1.25x 'current money' adjustment - giving around $75bn a year of missing tax revenue, which is exactly half of the $150 billion figure with which the tax is being sold to the public by Mr. Baker. That's just arithmetic necessity, on top of some more subtle, economic overestimates: 1) the 0.5% tax rate used by Mr. Baker for stocks, which is based on an optimistic assumption that both sides of every transaction can be always taxed, without any customer-firm transactions in which only one side is taxed, and the other (market-making firm) is exempt; in the worst-case scenario (of no customer-customer trades), that problem alone could reduce tax revenues by as much as $23bn a year in current money terms (36.5*0.5*1.25), 2) the assumption that the reduction in volume in case of stocks would not exceed 1/3, which may be justified only if we assume that a 66% rise of the tax rate from 0.3% to 0.5% (as in the Chinese case analyzed by Baltagi et al., 2006) causes the same market reaction (a mere 1/3 decline in volume) as a newly introduced tax, i.e. a nearly 1900% rise in transaction costs (from their current level of 0.014% to the post-tax level of 0.250%+0.014%), 3) the assumption that the reductions in volume in case of bonds, futures and options would not exceed 1/3, very optimistic given the 85%, 98% and 100% reductions observed actually in Sweden for these instruments, with tax rates on futures 10 times lower than the US ones (see Umlauf, 1993 or Wrobel, 1996), 4) no market-maker and other institutional exemptions, which can reduce tax revenues for all instruments by as much as 70% (judging by the stock market volume exempt from the UK stamp duty, according to the 2007 Oxera report). The only revenue underestimate to be found in Baker (2000) are the tax revenues for options, which have been assumed to be zero due to lack of appropriate market volume data.
agree fully. My strategy has been to support Secretary Geithner and the President in their preference for a bank levy and now fee over a FTT. I've also supported center leaders over the sponsors of the FTT bills. We have also weighed in with UK political-tax issues and in Germany too. As stated on an earlier post, taxes are fiscal policies coming from government and it can be very political as some pundits say the bank tax timing is. We need to make friends in government for our cause - no FTT and the needs of active traders - so we should not alienate either political party.
We know Europe and the G20 want long-term global cooperation on a financial crisis fix, which includes taxes or fees or levies. The UK one time banker bonus was a local short term move, not leadership on the long-term fix. Rather than let FTT forces gather momentum the US acted first to fill the leadership void and pre-empt the IMF April report with their bank liabilities tax. FTT would have to be global to prevent leaks but it's harder to move liabilities and bankers. The politics are global with Obama leadership now. The G-20 may wind up with a plan similar to Obama's plan and the US may modify that plan to accomodate bank complaints and global suggestions for improvement. The plans can vary by country. Republicans may prefer no bank tax and no global cooperation on bank or financial transaction taxes. Let's see if the tax dynamics change much over the next few weeks. Bankers are ramping up their fight against the bank fee.
Buffett Opposes Obama Bank Fee, Likens Plan to Taxing Congress http://bloomberg.com/apps/news?pid=20601087&sid=a25.GDpg8dgE&pos=2
Erin Burnett on the Transaction Tax again. She says they're meeting in the White House TODAY to talk about it. Vangaurd is there too.