Supporters of the tax include the expected -- the AFL-CIO, Democratic benefactor George Soros, economist Dean Baker, one of the few who saw the housing bubble and predicted its bursting, and consumer advocate Ralph Nader. The unexpected include billionaires Bill Gates and Peter G. Peterson; former Goldman Sachs chairman John Whitehead, and former chairman of the Federal Reserve Paul Volcker. Conservative political leaders behind it include German chancellor Angela Merkel and French president Nicolas Sarkozy. Experts promoting it include Nobel Laureates Joseph Stiglitz and Paul Krugman. Moral leaders advocating for it include Archbishop of Canterbury Rowan Williams and the Pontifical Council for Justice and Peace....
The European Commission recommended in September that the 27 European Union member countries adopt a .1 percent tax on financial transactions beginning in 2014. It estimated that the tax would raise $78 billion a year. Europe hesitates to institute the tax without a similar levy in the United States.Read the whole post at AlterNet
Earlier this month, two U.S. lawmakers who have long supported the levy introduced legislation to impose a smaller tax -- .03 percent or 3 cents on $100 in transactions. The tax proposed by U.S. Rep. Peter DeFazio, D-Ore, and Sen. Tom Harkin, D-Iowa, would raise about $350 billion over a decade.
Crash Tax: Wall Street Should Pay Reparations to the 99%
It's out of paradigm, since national governments with currency sovereignty don't fund themselves through taxation. However, taxation does act as a negative reinforcement of behavior, and it is arguable that a FTF would result in more orderly markets by reducing the "froth" due to "animal spirits."
10 comments:
Tom -- Maybe if the legislation mandated that the revenue be used for oversight, regulation, etc., it would at least get the money back into the economy. I'm always hesitant about taxes because it removes dollars from the economy. However, the negative reinforcement here would seem to be very appropriate. The high frequency traders are really distorting the markets and need to be reined in. Just need to make sure the dollars flow back to the economy and the government doesn't try to "save" them for the future.
Make it interesting, tie FTT rate it 3 month treasuries rate (a mere 0.01% today, one-third of Harkin's proposed tax rate).
John, the tax policy I would recommend is trimming exorbitant savings at the top and recycling it to where it will be spent, i.e, create, effective demand.
The ideal is to keep the sectoral balances in line with full employment with price stability while maintaining a reasonable Gini coefficient, as well as creating incentives for productive investment and disincentives for excessive rent-seeking.
I like the concept of discouraging speculation, especially on commodities, but am not convinced the 0.03% rate would make a dent in speculation ? ? ?
What say you, Beowulf ? I seem to recall you posted on this issue before over at Corrente ?
I've been struggling with a financial transaction tax for a while. Quite correct it is out of paradigm when it talks about raising revenue but I believe even MMT is accepting of economic rent taxes. So you remove the revenue raising concept and it becomes a rent tax.
That would make it within paradigm wouldn't it?
Assuming so, the question becomes how large a tax is sufficient enough or will it have little to no effect and only effect small and personal traders?
Senexx, taxes do two things. First, they remove net financial assets from non-government selectively. Secondly, they discourage behaviors that are taxed. All taxes need to be approached in this light according to MMT.
Paraphrased that answer seems to be "Yes".
Please clarify if I'm wrong on the paraphrase.
I don't think that MMT folks are agreed on this. I believe that Warren doesn't like the FTT. They agree on the principles I stated, but may disagree on how they should be implemented.
Based on Bill Mitchell and early reports of the Tobin Tax/FTT and that it was just a revenue raiser I was opposed as well.
From my own understanding of MMT, it would be sympathetic to rent taxes, the FTT is essentially a rent tax but it is an international one rather than a Nation State one which makes implementation difficult. What if one country does but another country doesn't, etc?
I would also question what would happen to the small trader?
It all comes down to implementation I think. And how large a tax would regulate the volatility?
None of what I said is to say I support the FTT but it seems sympathetic to the MMT paradigm (provided I'm correct on rent taxes)
I'm happy to be corrected on MMT and rent taxes.
Thanks Tom.
I see the FTT as a tax on economic rent and a deterrent to high frequency trading. I don't see it significantly affecting small traders. For them, it is insignificant in comparison with commissions. Commissions don't affect the really big players, most of whom are market makers. But an FTT would add up.
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