Poll: Poll: Prime Minister Theresa May calls General Election on June 8th

Who will you vote for?

  • Conservatives

  • Labour

  • Lib Dem

  • UKIP

  • Other (please state)

  • I won't be voting

Results are only viewable after voting.
Status
Not open for further replies.
As if Labour didn't have enough problems with its shadow ministers demonstrating their innumeracy over the last few days - we're back with the 'Robin Hood Tax' being a serous proposal:

http://www.independent.co.uk/news/u...neral-election-latest-manifesto-a7734566.html

Labour said it would impose a levy on derivatives transactions of 0.5 per cent for non-financial companies, and of 0.2 per cent for financial companies like banks and hedge funds.
Click to expand...

So unlike stamp duty they're going to target intermediaries too! For people who aren't exposed to financial markets and don't appreciate how utterly stupid this proposal is take a look at this document from law firm Clifford Chance re: a previously proposed EU tax on derivatives of 0.01%. Let alone the above reported 0.2% supposedly proposed by labour! In particular the diagram on page 4 - overnight funding for banks would be utterly crippled by this.

Download PDF(164Kb | English)

In addition to the above the effect on liquidity would likely be a disaster - how does labour expect to fund all their other spending if they kill the secondary market for gilts? It isn't like labour's plans are fiscally responsible - all the spending they're promising will require an even bigger deficit yet if they kill the markets that allow them to borrow in the first place then....
 
That sort of tax was tried in Sweden. It completely destroyed their stock exchange's futures trading.

Wikipedia said:
Sweden's experience in implementing Tobin taxes in the form of general financial transaction taxes[edit]
In July, 2006, analyst Marion G. Wrobel examined the actual international experiences of various countries in implementing financial transaction taxes.[48] Wrobel's paper highlighted the Swedish experience with financial transaction taxes. In January 1984, Sweden introduced a 0.5% tax on the purchase or sale of an equity security. Thus a round trip (purchase and sale) transaction resulted in a 1% tax. In July 1986 the rate was doubled. In January 1989, a considerably lower tax of 0.002% on fixed income securities was introduced for a security with a maturity of 90 days or less. On a bond with a maturity of five years or more, the tax was 0.003%.

The revenues from taxes were disappointing; for example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million.[49] In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988.[50]

On the day that the tax was announced, share prices fell by 2.2%. But there was leakage of information prior to the announcement, which might explain the 5.35% price decline in the 30 days prior to the announcement. When the tax was doubled, prices again fell by another 1%. These declines were in line with the capitalized value of future tax payments resulting from expected trades. It was further felt that the taxes on fixed-income securities only served to increase the cost of government borrowing, providing another argument against the tax.

Even though the tax on fixed-income securities was much lower than that on equities, the impact on market trading was much more dramatic. During the first week of the tax, 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. On 15 April 1990, the tax on fixed-income securities was abolished. In January 1991 the rates on the remaining taxes were cut in half and by the end of the year they were abolished completely. Once the taxes were eliminated, trading volumes returned and grew substantially in the 1990s.
Click to expand...
 
Dolph said:
The government should occupy itself with managing the protection and balancing of rights. That's where taxes and mitigation strategies are relevant to, for example, global warming. If the consequence of pricing in those external costs is that a solution is less attractive then so be it.

What the government should not do is randomly slap amounts on to one method and push the money into a general pot rather than using it for mitigation.

So tax to pay for maintaining and investing in roads, covering costs of road related accidents and environmental impacts, targeted and spent specifically on those purposes are fine. Tax to subsidise rail users is not, nor are taxes that massively outstrip mitigation spending, in my view.

You may have liked the reduction to absurdity, but it isn't a counter argument.
Click to expand...

That's one of the reasons governments subsidise train travel.

In this case the rights involving travel around the country and the rights of those not to live in a heavily polluted country. Subsidizing the realiways reduces congestion on roads while also reducing pollution and other environmental damage.
 
StriderX said:
Africa certainly doesn't and that continent is experiencing a huge population increase, they will not slow their GDP growth because some hissy-fit westerners.

Literally any gain we make in going renewable will be entirely counteracted by Africa.
Click to expand...

Actuall small scale renewables have and are taking off in a big way in many parts of Africa. Much like the skipping of landlines and the move straight to mobile phones, outside of cities many communities may well skip state level energy and go straight to community driven energy generation, largely based on solar and wind.
 
Gigabit said:
I think I might be coming round to the idea of nationalising the railways. I'm struggling to justify the current situation now.
Click to expand...

Personally I'm not really for it in the slightest (outside of the track, which is already nationalized). As I've said a few times on here setting up a public ally owned company to compete fairly with the private franchisors would be much better IMO. That way if it's better (such as the Eastcoast example) it will eventually take the majority of the franchises anyway.

I doubt it would ever happen properly though as it's a reasonable middle ground and neither side would accept it as a solution. It's not proper nationalization for Labour and it's undue "competition" for the conservatives.
 
I think maybe we should take a leaf out of the European countries' books and maintain some ownership of these kinds of assets. It would generate a bit of positive income for the Government surely if say 10% of each franchise's profit was returned to the Government.
 
It was said on radio4s any questions show today that the greatest secret about the UK rail network was that it was already basically nationalised due to the amount of tax payers money being endlessly ploughed into it.

I think it's time to let the experiment run out and retake back the franchised areas as they expire.
 
So, the Torys pledge another 'house building revolution' this time involving brownfield sites, compulsory purchase at below market rates, and council houses. Do you think they actually mean it this time or is this just more waffle that all parties seem to say when it comes to election time and housebuilding...
 
Quartz said:
That sort of tax was tried in Sweden. It completely destroyed their stock exchange's futures trading.
Click to expand...

I wonder at this.
Does it mean most of the transactions are based on microchanges? Small flucuations, and massive amounts being shifted up and down regularly?
I can't see what else a 0.003 tax would bring upon things otherwise. If trading was cut 85% who was doing such trading, and what type was left doing the remaining trading?

I just ponder is such a market actually beneficial to the nation at all?
 
Hikari Kisugi said:
I wonder at this.
Does it mean most of the transactions are based on microchanges? Small flucuations, and massive amounts being shifted up and down regularly?
I can't see what else a 0.003 tax would bring upon things otherwise. If trading was cut 85% who was doing such trading, and what type was left doing the remaining trading?

I just ponder is such a market actually beneficial to the nation at all?
Click to expand...

The trade simply moved to other exchanges, so not only does a robin hood tax fail to bring the expected revenue, it damages tax take and gdp indirectly as well.

It's economic lunacy.
 
Hikari Kisugi said:
I wonder at this.
Does it mean most of the transactions are based on microchanges? Small flucuations, and massive amounts being shifted up and down regularly?
I can't see what else a 0.003 tax would bring upon things otherwise. If trading was cut 85% who was doing such trading, and what type was left doing the remaining trading?

I just ponder is such a market actually beneficial to the nation at all?
Click to expand...

TLDR; Government did something the bankers didn't like so they colluded to make it a failure.
 
Amp34 said:
That's one of the reasons governments subsidise train travel.

In this case the rights involving travel around the country and the rights of those not to live in a heavily polluted country. Subsidizing the realiways reduces congestion on roads while also reducing pollution and other environmental damage.
Click to expand...

Thats not a reason. The impact of road transport can be priced in for road users through targeted and ring fenced taxes as I discussed. If the railways are still too expensive and the car still more popular, then the money should be invested into road improvements (as you are already managing external costs of road transport), not poured into making the trains only moderately more expensive than road travel.
 
[
Gigabit said:
Because taxing the city is really going to encourage them to stay after Brexit. But as Corbyn really thinks, Marxism is the answer.
Click to expand...

If May gets us out on a Hard brexit, they will all move their HQ's to Paris anyway because they won't have RU passporting. Macron would be very welcoming of them.

Or May makes a tax haven on the shores of the EU and we suddenly make even less from the financial sector and annoy our closest trading partners at the same time.
 
RDM said:
Or they went elsewhere to a market that didn't charge them?
Click to expand...

Oh either way, governments can't control the financial services industry. Especially not the UK which desperately needs to cling on to it post-Brexit.

Just give that up and accept the fact tax-payers are going to pick up the tab again next time they destroy the global economy.
 
Dolph said:
The trade simply moved to other exchanges, so not only does a robin hood tax fail to bring the expected revenue, it damages tax take and gdp indirectly as well.

It's economic lunacy.
Click to expand...

Specifically though, of what benefit to the nation would these 85% of transactions that were lost be?
What do they do, what do they mean?
If they are not taxed they generate no income for a nation, so what purpose do they serve?

I have no knowledge of this particular brand of 'banking'.
 
Status
Not open for further replies.
Back
Top Bottom