Comments for Tax Research UK

Comment on FSA on defensive over Lehman failings by FCAblog

FCAblog — Sun, 21 Mar 2010 13:34:26 +0000

Hi Richard

I don’t know whether you want to debate this here or over at my blog. Either way, I reiterate my claim that your analysis of this situation isn’t right. I’ve explained why on my blog. I’m happy to do so here as well, if you like.

It would be nice if you could provide a little more detail of why you disagree, beyond “your view of accounts is simplistic” and unsubstantiated statements that I am “just wrong”.

Comment on Why we need financial transparency by Richard Murphy

Richard Murphy — Sat, 20 Mar 2010 20:53:25 +0000

@JohnBuckles

If you haven’t yet noticed, the Tax Justice Network is one of the biggest critics

Comment on Prove City trading is of benefit or shut up by mad foetus

mad foetus — Sat, 20 Mar 2010 19:53:30 +0000

I think its well established that most retail punters spread bet and use contracts for difference to get exposure to shares, especially if they are looking to trade in and out. So I assume stamp duty is paid by “buy and hold” investors, whereas speculators don’t pay any tax at all. Which seems illogical in the extreme but a good example of how the market evolves (quite literally) to exploit weaknesses (in this case stamp duty).

Comment on Why we need financial transparency by JohnBuckles

JohnBuckles — Sat, 20 Mar 2010 14:32:26 +0000

The US Senate acknowledged recently that their system was being abused for bribery and corruption…in fact I read a report recently that stated that the USA is the favoured place to launder money. Isn’t it time the policeman of the world got their back yard in order?

Comment on $10 trillion of offshore deposits by JohnBuckles

JohnBuckles — Sat, 20 Mar 2010 14:30:47 +0000

Interesting to see the UK and USA top of the list. What do you suggest is down to bring them into line?

Comment on Time for a Robin Hood Tax by JohnBuckles

JohnBuckles — Sat, 20 Mar 2010 14:29:56 +0000

Strauss-Kahn of the IMF is against the Tobin tax…is that right?

Comment on Liquidity cannot be assumed to be good by Carol Wilcox

Carol Wilcox — Sat, 20 Mar 2010 09:46:55 +0000

@Alistair
Can you explain to me why the separate ownership of capital is essential for growth? Just because that’s the way we’ve been doing it for centuries is really no answer. The factors of production remain what they are. At one time it was felt essential for labour to be owned by a separate class - land too (well that is true to some extent now). Surely it is more just and efficient for those who produce wealth to have property rights over the inanimate factors of production, rather than have a middleman (making money out of money) appropriating some of the surplus.

Comment on Prove City trading is of benefit or shut up by Giles

Giles — Fri, 19 Mar 2010 18:06:43 +0000

By the way, in case my irritation spills over, I will end my contribution here. The argument you are hoping to win is: stamp duties or their like, despite charging 50bps, actually save both buyers (investors) and sellers (users of capital) money, by eliminating overtrading, what you call churning.

You have it seems three routes: the argument from logic, the argument from evidence, and the argument from authority.

The logic argument just fails without evidence. The system as a whole gives money to the government: to assert that it will remove it from just one section of the whole nexus without evidence is extraordinary, and goes against the recent trend of lower commissions but still higher dealing profits for banks etc we have seen in 20 years.

The argument from evidence: you are asked for this and refuse to give any, or you graciously admit to ‘flaws’, which may be translated as ‘no evidence’. In the meantime, two very respected bodies, at least, Oxera and IFS, believe otherwise, and use evidence in their methods over time.

Finally, the argument from authority: you invoke economists who you claim agree with you, but again there seems no proof that they believe this of equity trading. For FX trading I think there is a long and much more respectable tradition of calling for transaction taxes, and I happily acknowledge that. I suspect that and other matters is what Lord Turner draws on, not stamp duties.

As for the ad hominem stuff: you have called me a libertarian, and an apologist for the City. I hope I don’t need to prove that point any more!

Now, a pleasant weekend!

Comment on For GAAP read CRAP by Francine McKenna: LibertÃ©, EgalitÃ©, FraternitÃ©: Big Lehman Brothers Troubles For Ernst & Young | Blog All Over The World

Fri, 19 Mar 2010 18:03:25 +0000

[...] partner William Schlich puts on the Repo 105 treatment is different. EY defends the transactions as proper GAAP. “According to Schlich, Ernst & Young had been aware of Lehman’s Repo 105 policy and [...]

Comment on Prove City trading is of benefit or shut up by Luis Enrique

Luis Enrique — Fri, 19 Mar 2010 16:36:18 +0000

@Richard Murphy
Richard,

perhaps I shouldn’t have raised the question of motivation… what I was really after was some numbers. I had hoped, what with your emphasis on evidence based policy, you mights have some to hand.

At least you could tell us what estimates you are using internally to base your argument on (that stamp duty as proved beneficial via its reduction in the ‘incidence’ of churning on pensioners). What rough numbers do you believe, even if you cannot immediately provide evidence (see comment #5).

I’m intrigued by your idea that frequent trading delivers short term portfolio returns. How does that work. Say a period is 3 months. If frequent trading improves your returns on that time horizon (despite paying all those dealer fees) what happens in the next period … does your portfolio give up its gains? So over a 6 month horizon, churning does’t help. If the gains are not given up, then churning leads to more durable gains, in which case one might question whether it’s churning at all, or merely good investing.

It is not clear to me how stamp duty aligns manager returns with pension fund objectives.