European Tax on Financial Transactions...

[Mick Mac]

This makes no sense to me. Its a tax on London as the financial capital of the world and if anyone in this country sees it as a good idea then please expalin to me why this is the case.

Personally I think it will make us less competitive. There are few things that Britain leads the world at these days and this is one of them. It will drag investors away from Europe and into the US/Asia. London will be weakened as a financial centre as compared to New York/Asia and as a result the UK will likely lose huge amounts of employment and corporation taxes. Less money will then be available to fund our huge debts and public expenditure, including public sector salaries and pension obligations.

[Loz]

The phrase is "cutting off the nose to spite the face". We have to punish those bad bankers. Even if it does cripple the economy. That'll teach them... as they move offshore.

Unless the major financial centre of the world impose it in unison, it will fail. And I can't see China falling into line anytime soon as, if the UK/Europe and the US impose this, Hong Kong will become the place to do business.

[HAL9000]

In its original form, it was supposed to curb anti-social speculation: read all about it: Financial transaction tax

Is it just me or can any one else hear the sound of fiddling while Rome burns?

[StraferJack]

Well Joseph Stiglitz would be better qualified than most of us to comment and he's a supporter

That doesn't mean he's right, just that it's wrong to call the whole thing anti-London, European-led, anti bank

Paul Krugman, no leftie he - has also weighed in

Against it we have the Taxpayers Alliance - a bunch of barking mad, single-note tub-thumpers

As for Loz's point can we please please please stop with the "bankers will abandon us" thing? Even bankers have said post finanial-crisis that better regulations should have been in place. But prior to teh crisis any move towards ANY kind of regulation was met with that kind of "we will move to somewhere more competitive" rhetoric

That doesn't make me anti-banking at all, but some perspective please

[Mick Mac]

This is a case of investors will abandon us rather than bankers moving offshore. Its the investments that suffer the tax and these will go elsewhere, leaving us with too many bankers.

Unemployed bankers don't pay any tax.

[StraferJack]

but it's not just a European tax - it is being mooted by many different regions

and whilst "Unemployed bankers don't pay any tax." is true, it's true of everyone unemployed

[Loz]

StraferJack Wrote:

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> As for Loz's point can we please please please stop with the "bankers will abandon us" thing?

> Even bankers have said post finanial-crisis that better regulations should have been in place. But

> prior to teh crisis any move towards ANY kind of regulation was met with that kind of "we will move

> to somewhere more competitive" rhetoric

But isn't that exactly how Blair and Brown positioned the City to leapfrog New York to become the leading financial hub? They reduced regulations (which admittedly helped cause the mess we're in) and the financial institutions duly shifted their operations over here.

In times of global operations it is very simple task to route transactions through alternative countries. And bankers (and the tax they pay) tend to go where the money is.

I have no problem with the tax itself, but unless it is imposed unilaterally it will cause major issues for London. Sweden tried to do it on their own once, and "the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared."

[Jeremy]

SJ, that is a poor post. You just hand-picked a couple of economists who (could possibly be seen to) agree with one side of the argument. Besides, Stiglitz supports a world-wide financial transaction tax, which is very different from a Europe-wide tax.

And as if the Taxpayers Alliance are the only ones against the tax?! Come on!!

As for the "bankers will abandon us" argument... when it becomes more effective to do business somewhere else, it will happen (why on earth wouldn't it?)

[StraferJack]

Blimey - I never expected anyone to take my examples as being the only ones. Of course I cherry-picked but only to reply to Mick's one-dimensional question. And Siglitz supporting a global tax is exactly the point I made later - it's not some idea proposed soley by the EU

[*Bob*]

What does the little lady think, Mick?

[????]

The Germans and French would love it as 80% of it would be paid by us....for about a year....and then all the FEX operations etc would move elsewhere and not us or them would get a cent. Global, I'm in, without, never. Foook me if the lunatics ever get their hands on the keys this country will be like Greece...without the climate.

[????]

PS Globally, never gonna happen, so Osbourne was right to point out at the last finance ministers that European Finance ministers had more pressing issues to discuss than this pie in the sky. Talk about fiddling while Rome/Athens/Madrid?Dublin burns

[StraferJack]

That's closer to my position than you might think from my posts above but as a concept, it should be on the table

[????]

ok. Agree, but I don't think it should be priority on the European table at this exact moment in time for obvious reasons. I think global dialogue on this is reasobnable, but remain a biy cynical about it every happenning (*see also Kyote? or whatever it was)

[StraferJack]

What's happening now is a result of many things, some of which you correctly identify on another thread re: Euro, but primarily it is a result of the 2008 banking crisis. The dialogues wasn't "permitted" before 2008 ("we don't need regulation!") and since then events have moved on to a degree where it's deemed irrelevant to worry about piddly banking details when so much else is at stake

And it's hard to disagree on one level

But it is odd that SO much banking reform happened post 30's depression, to secure a stable base, when so little has happened this time. The banks/financial industry are calling the shots to a degree unknown back then and it is that which undermines so many government initiatives now.

I appreciate times are different, technology and global economy etc, but my view is that governments need to be able to, at least for a few years, slap down ratings agencies, certain market activities until stability has returned. Then we can look to open things up again. But as things stand what democratic countries need/want and what markets/institutions need/want are very different. An elected government can't stay elected appeasing the markets so it's a vicious circle

It's not an EU created or specific circle so to me, any criticism of the EU alone is also fiddling whilst Rome burns. It doesn't make the critique incorrect but it's not really the point either

[Mick Mac]

StraferJack Wrote:

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> > Global, I'm in, without, never.

> That's closer to my position than you might think

> from my posts above but as a concept, it should be

> on the table

That's why the thread is entitled "European" Tax on Financial Transactions. The clue is in the question.

[katie1997]

I'm struggling to understand the original question Mick Mac. Any chance you could put it into language I can easily understand, perhaps using a few analogies about fluffy kittens and sparkly things? Thanks

[Jeremy]

Is this proposed transaction tax just EU-wide? I'm assuming Switzerland would not be involved...

[Mick Mac]

katie1997 Wrote:

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> I'm struggling to understand the original question

> Mick Mac. Any chance you could put it into

> language I can easily understand, perhaps using a

> few analogies about fluffy kittens and sparkly

> things? Thanks

I have pm'd you, honey bunny.

[Mick Mac]

*Bob* Wrote:

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> What does the little lady think, Mick?

She's really not sure what to make of it all. But as she used to work for GoldmanSachs she probably has more of a clue than most.

[Chippy Minton]

It was discussed by the G20 a few weeks ago so (potentially) it would be pretty much global. The discussions didn't get anywhere though, not least because Osborne strongly opposes it.

[*Bob*]

I was talking about Angela Merkel, actually.

[red devil]

Mick Mac Wrote:

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> *Bob* Wrote:

> --------------------------------------------------

> -----

> > What does the little lady think, Mick?

>

> She's really not sure what to make of it all. But

> as she used to work for GoldmanSachs she probably

> has more of a clue than most.

I bet the GS traders really miss the elevenses cake trolley...

[Mick Mac]

If my wife had worked for Goldman Sachs, she'd still be there now and I'd be at home watching daytime tv.

[Loz]

Chippy Minton Wrote:

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> It was discussed by the G20 a few weeks ago so (potentially) it would be pretty much global. The

> discussions didn't get anywhere though, not least because Osborne strongly opposes it.

Not to mention China and the US. Without those three on board it's pretty much dead in the water.