11 euro nations back financial transaction tax

[sabaku_no_gaara]

LUXEMBOURG/ATHENS — Eleven eurozone countries agreed on Tuesday to press ahead with a disputed tax on financial transactions designed to help pay for the cost of fixing a crisis that has rocked the single currency area.

The initiative, pushed hard by Germany and France but strongly opposed by Britain, Sweden and other free-marketeers, gained critical mass at a European Union finance ministers’ meeting in Luxembourg, when more than the required nine states agreed to use a treaty provision to launch the tax.

The so-called “Tobin tax”, first proposed by Nobel-prize winning U.S. economist James Tobin in the 1972 as a way of reducing financial market volatility, has become a political symbol of a widespread desire to make banks, hedge funds and high-frequency traders pay a price for the crisis.

http://business.financialpost.com/20...ansaction-tax/

On one hand a fine step in the right direction, on the other hand several nations aren't participating like the Netherlands and the the UK So it's likely that these kind of transactions will just move overthere

[Adar]

It would be a much better idea to just solve the core issue. We've created a financial market with far too much money and great incentives to create complex derivates that create "profit" by miss calculating the risk you take by holding the derivates. Instead of creating a tax that makes the system even more prone to corruption we should take the following measures.

1) Stop feeding the financial market by pension funds. Even a small nation like Sweden got a hugely bloated pension system with more than 300 billion Euro feeding the financial market. Current pensions require a certain rate of return to work and the money is therefore handed over to hedgefunds who invest in junk bonds, industries moving abroad to increase earnings and other harmful projects. The old system with state guaranteed pensions was a ponzi scheme as people lived longer but retired at the same age with a generous pension. But the current system is even worse as it feeds a ruthless market while investors make billions by "skimming the top".

2) Outlaw complex derivates. This whole crisis started with American rating firms being unable to properly calculate the market risk of bundled bonds and to prevent it theres only one reasonable solution and that is to prevent the creation of complex derivates who's sole rationale is to manipulate risk ratings.

3) Break up the Eurozone and write debt in national currencies. All money are debt and there is no way that nations as Greece will be able to raise productivity enough to pay off their debts. It's going to cause huge damage to pension funds and loan givers but it is the only way to ensure that nations stay competitive.

[justicar5]

It would be a much better idea to just solve the core issue. We've created a financial market with far too much money and great incentives to create complex derivates that create "profit" by miss calculating the risk you take by holding the derivates. Instead of creating a tax that makes the system even more prone to corruption we should take the following measures.

1) Stop feeding the financial market by pension funds. Even a small nation like Sweden got a hugely bloated pension system with more than 300 billion Euro feeding the financial market. Current pensions require a certain rate of return to work and the money is therefore handed over to hedgefunds who invest in junk bonds, industries moving abroad to increase earnings and other harmful projects. The old system with state guaranteed pensions was a ponzi scheme as people lived longer but retired at the same age with a generous pension. But the current system is even worse as it feeds a ruthless market while investors make billions by "skimming the top".

2) Outlaw complex derivates. This whole crisis started with American rating firms being unable to properly calculate the market risk of bundled bonds and to prevent it theres only one reasonable solution and that is to prevent the creation of complex derivates who's sole rationale is to manipulate risk ratings.

3) Break up the Eurozone and write debt in national currencies. All money are debt and there is no way that nations as Greece will be able to raise productivity enough to pay off their debts. It's going to cause huge damage to pension funds and loan givers but it is the only way to ensure that nations stay competitive.

1) how then would people get pensions?
2) Agreed.
£) Or federalise the Eurozone further, share the debt and create a mini-USE.

[Phier]

Are there no problems that taxes can't solve?

[justicar5]

Are there no problems that taxes can't solve?

some, but since we have government involvement in the banking industry anyway (limited liability is the major one, remove that and watch the banks become stable, sane and safe) we may as well offer them this choice: More tax, or you, personally become liable for the bank you are the CEO or board member of.

[AqD]

1) how then would people get pensions?

no pension, no problem

[torongill]

no pension, no problem

actually it's no people, no problem.

[Ludicus]

actually it's no people, no problem.

Right
The "virtues" of laissez faire/1840s Great Irish Hunger (indeed, not famine) came to my mind.

---

In Sweden...

Sweden is one of the very few (I dare to say,probably the only one) civilized countries in the world.

[Adar]

1) how then would people get pensions?

In Sweden "the old system" ment that your pension was calculated by how much you earned during your 15 highest earning years. This failed as people lived longer and studied more (=shorter work period but higher wages) which caused the system to be underfunded.

A hybrid solution would be to set up infrastructure funds where guaranteed pension money are used to fund long term growth. Sweden for example got the Central Study system where study loans are given out. Funding this system by pension funds would generate a profits just like current pension funds are doing (when stocks go up). Likewise highways with toll boths could be funded by the pension funds and returns given to them instead of investment companies.

£) Or federalise the Eurozone further, share the debt and create a mini-USE.

If cutting yourself hurts, then it's probably not a good idea to get a bigger knife.

[Basil II the B.S]

It would be a much better idea to just solve the core issue. We've created a financial market with far too much money and great incentives to create complex derivates that create "profit" by miss calculating the risk you take by holding the derivates. Instead of creating a tax that makes the system even more prone to corruption we should take the following measures.

1) Stop feeding the financial market by pension funds. Even a small nation like Sweden got a hugely bloated pension system with more than 300 billion Euro feeding the financial market. Current pensions require a certain rate of return to work and the money is therefore handed over to hedgefunds who invest in junk bonds, industries moving abroad to increase earnings and other harmful projects. The old system with state guaranteed pensions was a ponzi scheme as people lived longer but retired at the same age with a generous pension. But the current system is even worse as it feeds a ruthless market while investors make billions by "skimming the top".

2) Outlaw complex derivates. This whole crisis started with American rating firms being unable to properly calculate the market risk of bundled bonds and to prevent it theres only one reasonable solution and that is to prevent the creation of complex derivates who's sole rationale is to manipulate risk ratings.

3) Break up the Eurozone and write debt in national currencies. All money are debt and there is no way that nations as Greece will be able to raise productivity enough to pay off their debts. It's going to cause huge damage to pension funds and loan givers but it is the only way to ensure that nations stay competitive.

I agree with point n.1 and 2, but you can forget about n.3. Not going to happen, ever.

share the debt .

No ing way. That would be a reward to the governments that wasted money over the last few decades. Merkel is right on this. No to the eurobonds or similar solutions, until Greece, Italy and so on fix their public spending.

Other than that, the Tobin tax is due at this point. Austerity measures without it are politically unacceptable. All the responsibles must pay their sahre.

[justicar5]

1)No ing way. That would be a reward to the governments that wasted money over the last few decades. Merkel is right on this. No to the eurobonds or similar solutions, until Greece, Italy and so on fix their public spending.

Other than that, the Tobin tax is due at this point. Austerity measures without it are politically unacceptable. All the responsibles must pay their sahre.

Without further federalisation, yes it would be, but considering with further federalisation they would be (this would have to be after a referendum, an in/out one) passing control to a super national federal european government (that would also need to be elected, which also would take time) the governments would be voting themselves out of power. If they leave the Euro (which has to remain a choice until and unless further federalisation is voted in) then the German bank sector instantly implodes, it made the vast majority of loans, and overcooked the Spanish property market. If the Euro goes down, Germany goes down the hardest of all.

[Dr. Croccer]

It backfired when Sweden tried it in the late 80s, why wouldn't it now?

As Adar said, they need to address the core issues at heart. The problem is that they won't do that because it would require them to implement reforms that would undo their USE project. Hence why they're forced to come up with alternatives which are only slightly better than total economic collapse, like this:

Or federalise the Eurozone further, share the debt and create a mini-USE.

[Thorn777]

Wont do much without several other measures taken simultaniously. Its at least a move in the right direction and its said to take some time before implemented, so I wonder if they might wake up.

In a sanitized market without crazy speculating going on all over, on whatever crazy financial innovations, and outside markets spinning out of real-economic controll, It could even prove to sound investors to be a place where your money can make long term sense. But I dont see how the market of these 11 nations is adjusted enough to become independent from ping-pong money.

Way things are now, its heading out anyway, so why not take the opportunity and roll with it. The world better gets an alternative to the nonsense out there, but before that, we need to get we are just to indulged in the nonsense ourselves.

It takes a wide spectrum of reforms, but this is certainly one of them.

[Kanaric]

taxing people to use their money is the stupidest ever. I especially hated it when ATMs started charging fees. Charging you to get your money. Corporations and nations do this and nobody seems to ever care. They only care about income tax when that money is not even yours to begin with, i never even SEES your bank account.

[removeduser_487563287433]

http://business.financialpost.com/20...ansaction-tax/

On one hand a fine step in the right direction, on the other hand several nations aren't participating like the Netherlands and the the UK So it's likely that these kind of transactions will just move overthere

They already are over here. That's why France and Germany are so keen, this is just a tax on the city of London. Screw that.

[Thorn777]

Oh poor little city of london. Everybody hates us foor no reason, and they all want to get us. Its a British issue. Screw Frankfurt, Paris and Madrid.

[removeduser_487563287433]

The City of London is the financial capital of this planet. Be faecitious if it pleases you, this is a tax on London, not Paris, not Frankfurt and depending on who you listen to not even New York, and that's why France and Germany back this, and why the UK does not. Just another attempt to get our money to pay for the Eurozone up.

[Thorn777]

The City of London is the financial capital of this planet. Be faecitious if it pleases you, this is a tax on London, not Paris, not Frankfurt and that's why France and Germany back this, and why the UK does not. Just another attempt to get our money to pay for the Eurozone up.

Oh Ferrets, the more I learn the more I learn how little the economic-reactionary hipsters learned in life.

fact 1: Its a tax on them all and the city isnt the only financial center making lots of money.
fact 2: This was already on the table before the eurocrisis and Britain was almost alone on the issue back then already so your defensive patriotism makes no sense. You sound more irrational than all the Greeks you accuse of only blaming others.
fact 3: city of london and many of the practices going on there is distructive, however little or small of a financial capital it is. No need to be overly protective on everything they do.
fact 4: taxation needs modernization. If you want so much emphazis in your economy on finances you better start taxing accordingly. UK would even raise more than the rest and so I'd rather see it as an advantage. There is no way around curbing the volatility in finances anyway.
fact 5: that 11 nations do this now on their own, despite knowing they deal with a single market with the UK around that can suck anything up, also proves it never was about hurting el city. Its ok ferrets, we dont want to hurt you important ferrets.

But go ahead praize the shiney objects of the high priests of moneyz and defend them from ever getting hurt by the johnny continentals evil doers.

[removeduser_487563287433]

God, I would help you if you could just admit to what parts of posts you cannot understand, I would. The UK disagrees with this because it will affect the UK much more than anybody else, do you admit to that or is this a matter of denial?

[Raubritter]

On one hand a fine step in the right direction,

The power to tax is the power to destroy.