It sounds good - almost as good as "make the rich pay" - "make the bankers pay!!!".
Here's the rub - a tax on financial transactions will almost certainly turn into a tax on withdrawals, transfers, debit card use etc. So who will pay the tax? The bankers or ordinary Canadians?
What's more, this tax would be another encouragement to the cash-only economy. An economy that avoids tax in its entirety.
A Robin Hood tax is a gimmick. We need sensible and fair taxes that apply to all economic vehicles and raise enough revenue to pay for needed social programs. That may well mean raising taxes - but if taxes go up we can't say 'just the bankers' - we all have to pay our fair share (including bankers yes but also farmers and teachers and business people and lawyers):
A crowd of protesters from Occupy Edmonton took over a section of a downtown street on the weekend.
The rally on Jasper Avenue Saturday called on the G20 finance ministers that are meeting in France this week to agree on a so-called Robin Hood tax.
The protesters were calling for the tax on banks to be used to alleviate poverty and fight climate change.
Other rallies held around the world were also calling for the tax.
Chelsea Taylor, a spokesperson for the group, says a tax of just 0.05 per cent on financial transactions could raise billions of dollars.
4 comments:
I think you are simply incorrect in this case because a government can legislate a tax specifically on certain kinds of financial transactions (on a very small percentage basis) and the government can also restrict Banks on what they can charge for regular customer transactions. Taxes would be levied on, for example the sale and purchase of stock, futures, the sale of loan notes, and the buying and selling of currency.
With all due respect Morton, I believe what you say in this blog post is very typical of the deep problem with LPC thinking and the primary reason that the party has almost entirely lost its base. You seem to imagine that capital enterprise is beyond out control as a people to control it and do what we think is best in the economy. It is what Marx called reification. Ironically, there was a time when Liberals understood the principles of social control and were willing to entertain the economics of men like Joseph Schumpeter. Now they take the line you have taken here and feigned lack of control, as though to say "Oh we can't do that because then the bankers will do this or that." But it is up to us what we will let the bankers do or not do, and the so called invisible hand is a phantom made up to justify exploitation. The idea lack fundamental rigor and quite frankly just won't do.
There are good reasons to be cautious of the Financial Trannsaction Tax, (discussed on Wikipedia here and here.) However, the arguments presented by Mr Morton are simply ignorant Tea Party garbage. Such arguments only play into the hands of the proponents of the FTT.
The FTT is a band-aid that's intended to make the current financial system and its ideological framework just a little bit better so that it harms ordinary people just a little bit less.
When we're talking global recession and many trillions of dollars in shadow derivatives and financial weapons of mass destruction, a little bit just doesn't cut it. Bankers might whine and moan outrageously about FTT, but it's definitely preferable to them over a complete re-evaluation of how society sees the economy and its bloated financial sector.
It wouldn't be surprising if some FTT proponents were players in high finance, trying to trap world governments into an even greater symbiotic relationship with the current model of banking. They can fortify and secure their position monetarily with governments and emotionally with people (they're already paying this special tax, it's unfair to ask anything more) for the cost of a mere fraction of a percent. Pretty good deal when others are talking about ending the central banking model entirely.
The priests of neoclassical economics have convinced the world that the sun revolves around the earth, and provided some wonderfully simple explanations based on this point of view. Too bad they fail to predict economic recessions, ignore private debt/credit, and just don't seem to work all that well anymore. When you end up handwaving away odd results and inconsistencies between your model and reality, maybe you should get a new model. Just as humanity moved on to understand that the earth revolves around the sun, we need a better viewpoint to understand how the economy works and set up a framework that isn't broken anymore.
James, I think you miss the boat on this one.
- first, ordinary Canadians already *do* pay financial transaction taxes, in the form of fees on withdrawals, transfers, debit card use, and the rest. Of course, these fees are paid to the bank, not the government. Adding (say) one percent to these fees will not even be noticed by Canadians.
- second, the purpose of a financial transactions tax is to place some friction on the huge trans-national transfers of wealth that occur unimpeded and which form the basis for runs on country currency, etc. Thus, it can be very small - in this context, 1 percent would be a *huge* tax; I would expect something even lower - along the order 0f 0.05 percent, which would not be detectable by consumers.
- third, calling it a 'robin hood tax' is a spin worthy of the worst of the shysters. Taxation is not theft. And even with such a tax, the rich will continue to receive a disproportionate share of government spending.
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