Merkel lines up transaction tax - Accountancy Age.
Sentiment for a levy on financial institutions was stronger today after German finance minister Angela Merkel called for an international finance tax.
Chancellor Merkel, speaking prior to a meeting of EU finance ministers tomorrow, said that a financial tax and stronger regulation would show the world that Europe had got a grip of the finance industry.
Very good news.
And the right response to the current situation where excessive liquidity is causing serious harm.
Read more on financial transaction taxes here.
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How many times do we have to say it.
Geithner said NO. He will be gone in November and it will still be NO. The United States, the largest economy on Earth, 15 times the size of the UK, have said NO. It will NOT happen.
Next topic?
@Ted G
When will you get it into your head that this does not require the US to say yes?
It can be done for individual currencies in isolation – no problem
Richard
The united make up 50% of the world economy.
The US Dollar is used for over 80% of the world’s financial transactions.
The minority of transactions not currently denominated in Dollars will be re-denominated in Dollars to get around the tax.
Makes you fell small, doesn’t it?
@Ted G
Can you supply a translation when you’re sober in the morning?
Ah ah!
I will make it slow and simple so you understand.
The United States will not impose a financial transaction tax.
Therefore, all transactions denominated in Dollars, which clear through the Federal Reserve system or through US-based money center institutions, will not be subject to this tax.
These transactions represent today approximately 80% of all worldwide financial transactions. They will NOT be subject to the tax.
In addition, one can anticipate that many financial transactions currently denominated in currencies other than the US Dollar, and which may become subject to a financial transaction tax, will in the future be denominated in US Dollars, and will therefore NOT be taxable.
Not that difficult.
Good night.
@Ted G
I wholly understand
You may not like this – but I am considered an expert on this subject – by others, and rather less so by me
And the reality is that I agree – more than 2/3 of all potential FTT revenues would arise on dollar transactions
But you miss three points
First that still leaves a lot to be raised elsewhere
Second, each currency can be taxed individually
Third, in my opinion revenue raising is not the sole reason for this tax. I happen to see its role in cutting speculation and excessive liquidity (and yes, I consider excess liquidity harmful) as being as important as its revenue raising qualities
Tax is not all about raising cash
There are fives reasons to tax:
1) Raise revenue;
2) Reprice goods and services in pursuit of social objectives (tobacco, alcohol, carbon emissions etc.);
3) Redistribute income and wealth;
4) Raise representation within the democratic process because tax is the consideration in the social contract between those governed and the government; and to facilitate
5) Reorganisation of the economy through fiscal policy.
If you don’t get that, you miss the point
@Richard Murphy
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