Bring in the Tobin tax for the banks.

[Expounder]

After the billions given to the banks to bail them out to avoiding a total financial meltdown, it's time they began to take financial responsibility for their own future failures.

The Tobin tax, a small levy on all global financial transactions, would be an insurance against their casino activities with peoples' savings. This small levy could raise tens of billions in revenue and would hardly make a dent in overall profits made by the banks

In all walks of life people and companies are expected to take out insurance against adverse events, and there is no reason why the banks should not do the same by paying a small levy on all transactions.

Had this idea or principle had been adopted when Tobin proposed it decades ago we would not have been facing the financial disaster we face to day.

In spite of the financial calamity they've caused by their outrageous and some times dishonest activities I understand they are completely opposed to this idea.

Legislation must be introduced to force them to accept in spite of their arrogance.


Why the Tobin tax could be Gordon Brown's legacy | Editorial | Comment is free | The Guardian

[Balthazar]

hehe This is going to be funny to watch. Already the City's howling.

Tobin Tax proposed by Europe

[JAMC]

At the risk of falling out with my left wing chums....

The more I consider the Tobin tax, the more it looks like the most pointless idea I've ever heard.

[Kiwi 1691]

At the risk of falling out with my left wing chums....

The more I consider the Tobin tax, the more it looks like the most pointless idea I've ever heard.

Its a ludicrous idea, with the way the UK economy is now, can you afford new taxes?

I think not.

[Balthazar]

The more I consider the Tobin tax, the more it looks like the most pointless idea I've ever heard.

You may be right, but why? It's a first, tentative step towards a world financial system. We can't continue with the present model whereby capital's internationalised while democracy's localised. It means the capitalists will always blackmail nation states (as they're doing in London atm). You've got to get the bug*ers by the balls! They're weaker and more hated now than at any moment in my lifetime, so now's the time to act.

[Barry]

At the risk of falling out with my left wing chums....

The more I consider the Tobin tax, the more it looks like the most pointless idea I've ever heard.

Bankers, for obvious reasons, are financially astute and will avoid paying this tax.
Believe me, I was once a NatWest employee!

[Expounder]

At the risk of falling out with my left wing chums....

The more I consider the Tobin tax, the more it looks like the most pointless idea I've ever heard.

JAMC, a case has been made for the banks to insure themselves against a repeat this financial mess they've got us into. It's a nominal amount set against enormous profits they make.

By law a motorist has to be insured at the minimum against damage or injury to a third party. Why should the banks not be forced to adopt the same principle after all they can cause real damage to people's financial security and it will cost buttons relative to what profits they make.

[Expounder]

Bankers, for obvious reasons, are financially astute and will avoid paying this tax.
Believe me, I was once a NatWest employee!

If it's introduced they will have to cough up and a fund established, I can't see how they can avoid paying it. If your saying it will be passed on to their clients it's still not a case for not introducing it.

Banking internationally has to be brought to heel after the disaster they have caused and should be made to face up to failures that they will undoubtedly make in the future.

[Balthazar]

I don't see a single argument against a Tobin tax on this thread: just fear and cynicism. It's sad seeing such lack of political self-confidence. These useless bankers can be brought to heal, future pensions and welfare services protected, a repeat of last year's crash avoided.

It's funny people are so scared and feel so powerless. Of course, once you feel like that you become like that: men are transformed into mice, stand-up people become victims.

It's exactly what the bankers and their political friends want. It's pathetic seeing people dance to their tune: like sock puppets with a Tory hand up their jacksie.

[Citizen Smith]

Tax them tax them and tax the some more- they have the profits, they have the salaries, they can afford it, even if they do kick up a fuss.

[Midas]

Tax them tax them and tax the some more- they have the profits, they have the salaries, they can afford it, even if they do kick up a fuss.

See here.

[Citizen Smith]

See here.

I don't give a **** about the economic climate and I don't give a **** about the market.
The government should tax the Banks and big bankers so that they can cut less public services.
SYou can be one of the people who listens when the Bankers complain, but they have already shown that they don't know how the economy works/or don't care, and its time tax got serious.

[DTE]

I don't see a single argument against a Tobin tax on this thread: just fear and cynicism.

Maybe one of the naysayers could offer a reason as to why this is such a bad idea? Or is it because the system works so well as is? After all, at the moment risk just a board game, right? When the taxpayer picks up the tab when it all goes tits up, whats not to love?

It's funny people are so scared and feel so powerless. Of course, once you feel like that you become like that: men are transformed into mice, stand-up people become victims.

The vast majority of people have become victims at the hands of the few. No wonder such a proposal is greeted with resistance, those few want the assurances they can **** it up all over again in the future, get bailed out again and still keep their frakkin bonuses.

It's exactly what the bankers and their political friends want. It's pathetic seeing people dance to their tune: like sock puppets with a Tory hand up their jacksie.

[JAMC]

You may be right, but why? It's a first, tentative step towards a world financial system.

We have had a world financial system for decades, it's just not centrally controlled. Introducing a transaction based tax does nothing to fundamentally alter the workings of the system, or temper it's worst excesses.

We can't continue with the present model whereby capital's internationalised while democracy's localised.

The tobin tax would not alter this. The very nature of applying a tax when capital leaves an economic jurisdiction underlines the locality of authority and accountability.

It means the capitalists will always blackmail nation states (as they're doing in London atm).

Again, this will still happen even if the tobin tax were in place, and even if the rate of the tax were non-negotiable internationally. It would simply occur over other factors of business that remain localised, such as corporation tax and capital gains tax. Introducing a global transaction-based levy does not eliminate competition between nation-states for capital. So long as nation-states exist in tandem with an international financial market, that competition will remain.

You've got to get the bug*ers by the balls! They're weaker and more hated now than at any moment in my lifetime, so now's the time to act.

I am not suggesting we do nothing - I am suggesting that the tobin tax is not an answer to any of the problems that have come to the forefront since the credit crunch hit. That, fundamentally I suppose is why I consider it pointless - because it ultimately changes very little.

[JAMC]

Bankers, for obvious reasons, are financially astute and will avoid paying this tax.
Believe me, I was once a NatWest employee!

Nevertheless governments don't apply taxation policy based on how likely it is to be adhered to. Remember the poll tax?

[JAMC]

JAMC, a case has been made for the banks to insure themselves against a repeat this financial mess they've got us into. It's a nominal amount set against enormous profits they make.

By law a motorist has to be insured at the minimum against damage or injury to a third party. Why should the banks not be forced to adopt the same principle after all they can cause real damage to people's financial security and it will cost buttons relative to what profits they make.

Firstly, I don't believe plans for the tobin tax so far ringfence revenue passed back to national governments for a particular purpose such as insuring against losses incurred by private companies that are "too big to fail".

Knowing the UK government in particular the money would just flow back into the general pot and be used for something else like the NHS.

Secondly, there's no way the revenue generated from the tobin tax could be used to underwrite the entire financial system - the rates I've seen mentioned range from 1% to 0.000001% - it is inconceivable that the system could be underwritten by such as small proportion set aside in this way, even assuming that it was ringfenced for such a purpose (which it won't be) I'm sure you remember AIG was one of the casualties of the crunch - they were the largest of many organisations that were supposed to underwrite the risk inherent in the financial system. They too in the end had to be bailed out by the US taxpayer to the tune of $85 billion, and I'm fairly certain that AIG would have charged considerably more than 1% collateral on all deals they were underwriting.

I am all in favour of changing the modus operandi of the financial markets to ensure that all risk is effectively and adequately mitigated. I remain deeply sceptical that the tobin tax, unless applied at a politically impossible rate of something like 15%, could actually accomplish that end.

In fact I think that although the city is kicking up a fuss over the tobin tax, if it were introduced as the sole measure to "ensure that the crisis didn't happen again", they would be secretly elated - as they would effectively have purchased their freedom from the politicians that currently own their arses for the princely total of 1% net.

This idea is a placebo, nothing more.

[JAMC]

I don't see a single argument against a Tobin tax on this thread: just fear and cynicism. It's sad seeing such lack of political self-confidence.

Check the above reply to Expounder for the arguments against.

These useless bankers can be brought to heal, future pensions and welfare services protected, a repeat of last year's crash avoided.

I agree with the principle, but not the method. If you want to affect a lasting change to the way the system operates, as well as cutting the 'masters of the universe' down to size, dispense with the tobin tax idea - it is the metaphorical equivalent of a pair of Crayola safety scissors. There are far more potent longswords out there that could be employed to the task.

[Balthazar]

We have had a world financial system for decades, it's just not centrally controlled. Introducing a transaction based tax does nothing to fundamentally alter the workings of the system, or temper it's worst excesses.

The tobin tax would not alter this. The very nature of applying a tax when capital leaves an economic jurisdiction underlines the locality of authority and accountability.

Again, this will still happen even if the tobin tax were in place, and even if the rate of the tax were non-negotiable internationally. It would simply occur over other factors of business that remain localised, such as corporation tax and capital gains tax. Introducing a global transaction-based levy does not eliminate competition between nation-states for capital. So long as nation-states exist in tandem with an international financial market, that competition will remain.

I am not suggesting we do nothing - I am suggesting that the tobin tax is not an answer to any of the problems that have come to the forefront since the credit crunch hit. That, fundamentally I suppose is why I consider it pointless - because it ultimately changes very little.

The point is that once taxes are levied at an international level, pressure will grow for the body which controls the levy to be under direct democratic control: no taxation without representation.

Currently, the capitalists slip through the net: the system is structured to allow precisely that. They flush money round the globe, seeking the most advantageous tax regimes and the most exploitable labour source (which, unlike capital, faces severe restrictions on movement). Internationalised tax arrangements would bring capital into line with labour.

[Midas]

Maybe one of the naysayers could offer a reason as to why this is such a bad idea? Or is it because the system works so well as is? After all, at the moment risk just a board game, right? When the taxpayer picks up the tab when it all goes tits up, whats not to love?

Because international banking and finance is a very competitive business and any increase in taxation, however small, can easily lead to a mass exodus of businesses to a lower tax country, resulting in both a loss of cash flow for the country, a loss of taxable income for the government and a loss of jobs for people in that industry.

The recent introduction of the 50% personal tax rate and the 50% tax on one-off bonuses in the banking industry have already seen the outflow of several billions of pounds worth of assets and cash flow; how much more do you want the country to lose? There comes a point, in a globalised world, where pragmatism has to rule over ideology, otherwise the country will simply become less and less competitive and lose more and more income and jobs to everyone's detriment.

[Balthazar]

Because international banking and finance is a very competitive business and any increase in taxation, however small, can easily lead to a mass exodus of businesses to a lower tax country, resulting in both a loss of cash flow for the country, a loss of taxable income for the government and a loss of jobs for people in that industry.

The recent introduction of the 50% personal tax rate and the 50% tax on one-off bonuses in the banking industry have already seen the outflow of several billions of pounds worth of assets and cash flow; how much more do you want the country to lose? There comes a point, in a globalised world, where pragmatism has to rule over ideology, otherwise the country will simply become less and less competitive and lose more and more income and jobs to everyone's detriment.

Once the principle of international taxation e.g. a Tobin tax, is accepted, these blackmail games which the bankers play - "Give us special treatment, implement socialism for the rich or we'll take our (your) money and run!" start to come to an end. If they move to a tax haven you just tax all the money going in and out of that jurisdiction. Modern computer systems make it pretty easy, and if they respond by moving suitcases of cash like the mafia you catch them at passport control and bung them in chokey.

The current situation is analogous to Cardiff and London having different tax regimes. So a London businessman could blackmail the London tax authorities by threatening to move to Wales! It's ludicrous. We're told we're living in a global village yet we're still operating a medieval tax regime.

But of course the bankers like it like that. It's what they mean when they demand 'less red tape.' They want the freedom to blackmail nation states, i.e. the very taxpayers who've just bailed them out.

[JAMC]

The point is that once taxes are levied at an international level, pressure will grow for the body which controls the levy to be under direct democratic control: no taxation without representation.

My understanding of the tobin tax is that any revenue generated will simply be passed back to the nation-state from which the capital is emigrating - i.e. the 'representation' exists, but remains firmly local. I fail to see how the tobin tax, even if every country on earth did apply it, would create a groundswell of support for what effectively ammouts to a global government.

The most comprehensive scenario we'd ever see in reality is that every country on earth signs up to an agreement to apply the tax at a uniform rate. However this eventuality is highly unlikely.

Practically speaking the most likely form of the tax would be one rate across the EU, different rates applied by the US, Russia, Japan, China and the rest of the world saying "thanks, but no thanks".

Can you honestly tell me that the above arrangement is going to right all the world's economic wrongs at a single stroke?

Currently, the capitalists slip through the net: the system is structured to allow precisely that. They flush money round the globe, seeking the most advantageous tax regimes and the most exploitable labour source (which, unlike capital, faces severe restrictions on movement). Internationalised tax arrangements would bring capital into line with labour.

Internationalised tax arrangements, i.e. uniform corporation tax, capital gains tax etc... across the whole globe aren't what's being discussed. We're talking about the tobin tax, which is a levy applied to any transaction that crosses international borders. I maintain that the tobin tax alone does nothing to mitigate the effects you describe above. It simply applies a negligible charge to the movement of capital in persuit of the least punitive tax regime - it won't stop the capital moving.

[JAMC]

Because international banking and finance is a very competitive business and any increase in taxation, however small, can easily lead to a mass exodus of businesses to a lower tax country, resulting in both a loss of cash flow for the country, a loss of taxable income for the government and a loss of jobs for people in that industry.

This argument doesn't apply (in theory) to the tobin tax because it would be applied across all jurisdictions. The factors that individuals and corporations weigh up when determining where their capital will reside will still remain of course, but there is now a 1% (or less) movement cost to be factored in.

In the example you mention below where the top rate of income tax has been raised from 40% to 50% in the UK, the question "should I move my money to somewhere that still has a 40% rate?" will still result in the same answer - i.e. Yes you should, because even if you have to pay the Tobin tax, it effectively means you would pay 41% rather than 50%.

The recent introduction of the 50% personal tax rate and the 50% tax on one-off bonuses in the banking industry have already seen the outflow of several billions of pounds worth of assets and cash flow; how much more do you want the country to lose? There comes a point, in a globalised world, where pragmatism has to rule over ideology, otherwise the country will simply become less and less competitive and lose more and more income and jobs to everyone's detriment.

I personally believe the tobin tax to be a nonsensical limp-wristed morsel thrown to placate those baying for banker's blood. Assuming we're stuck with a capitalist economy tied to a banded income tax system, I would also find it very difficult to justify a rate higher than 50% - even though it has been much higher in the past (I believe 83% while Thatcher was in office, and a 95% 'super-tax' existed in the 60's).

As I've said before, I believe there are other things we can do to muzzle the worst elements of the financial system, at least that portion of it that exposes the UK to economic peril.

• Cap on lending (circa 3.5 x annual income)
• A sensible interest rate (5%)
• Dispense with the pretense - fully nationalise the taxpayer owned banks, bring salaries in-line with other public sector orgs.
• Pass risk legislation outlining acceptable and unacceptable banking procedures.

[Expounder]

Nevertheless governments don't apply taxation policy based on how likely it is to be adhered to. Remember the poll tax?

Completely wrong analogy. The poll tax couldn't be collected in full because many city dwellers rented where constantly mobile and totally untraceable. In many cases also unidentifiable even when living for any length of time in a multiply occupied dwelling. The charge was against the person and not the property.

The way to ensure taxes by companies and individuals are paid is to pass international legislation that all tax havens [under threat of prosecution if they don't] are made to supply upon request, details of a company's or individuals account to his/hers country's authorities. This would make it a level playing field for all the would be tax dodgers they would have no where to hide. Any false accounting to be heavily fined.

Why is it that it's only us minions must be subjected to arbitrary investigation by the inland revenue of every penny claimed or invested but the tax dodging wealthy are legally allowed hoard their capital in secret havens?

This move would go a long way to forcing bankers to earn some respect.

Also enforce a level of Tobin tax commiserative with what would be required to prevent another world financial meltdown.

[Balthazar]

I fail to see how the tobin tax, even if every country on earth did apply it, would create a groundswell of support for what effectively ammouts to a global government.

Depends how it's structured. Everything's up for grabs. There's been talk of the UN administering it. So, in that form, it would be a step towards world government.

But that's the whole point. At the moment we've already got world government but run by unelected, unaccountable, irresponsible bankers with politicians in their pockets. Bankers rule but the people pay. When the people get angry about paying, but not controlling, the bankers, the latter engage in blackmail, attempt to subvert the rules, or sulk.

The most comprehensive scenario we'd ever see in reality is that every country on earth signs up to an agreement to apply the tax at a uniform rate. However this eventuality is highly unlikely.

If Europe, the Yanks and the Japs sign up to Tobin it would be very difficult for other financial centres to resist. Ultimately they could simply have the tax applied to them on all money transfers going in and out of their jurisdictions. How would they respond? Go to war? Russia might, I suppose, but then who'd buy its gas? China's locked to the US as its major creditor. The last thing they want is a shooting war.

Can you honestly tell me that the above arrangement is going to right all the world's economic wrongs at a single stroke?

Oh come on. Straw man central! No one on this thread has suggested it would. But Tobin would be a key symbolic and practical break with the past: bankers who act globally would be made financially responsible to those they exploit. It hits squarely on two, basic, democratic principles: no taxation without representation, and those with substantial power over others should be held accountable at the ballot box. Tobin, cleverly implemented, is explosive.

It simply applies a negligible charge

Depends at what rate it's set. And once the principle is agree and an initial rate set, it can always be altered. The sky's the limit. Pandora's box would be open and there'd be no going back.

Indeed, like all basic democratic reforms, once the change went through people will be amazed, looking back, that it took so long. That's why the bankers will resist Tobin so hard. They know it's a one way street and threatens their fundamental freedom to behave badly with no come-back.

Tobin rate-setting is also an area where democracy would lock in: elections would be fought and won on the basis of raising or lowering the Tobin tax. Again, that's a push towards world government and will be fiercely resisted by those with an interest in keeping us carved up in warring - financially or militarily - nation states. Tobin represents a massive attack on world conservatism: the right of the rich to exploit the poor with impunity.

it won't stop the capital moving.

Of course not. If capital stopped moving (a) Tobin would raise no money so would be useless and (b) rich nations couldn't invest in, say, infrastructure projects in poor nations. So capital must be allowed to move but under democratic control not banker control.

It's not rocket science. I'm amazed anyone would want to trust the world financial system to a bunch of unelected bankers and their tame politicians. It makes no sense.

[JAMC]

Completely wrong analogy. The poll tax couldn't be collected in full because many city dwellers rented where constantly mobile and totally untraceable. In many cases also unidentifiable even when living for any length of time in a multiply occupied dwelling. The charge was against the person and not the property.

I was referring more to the numerous brave, salt-of-t'earth working class people that turned round and said "F**k you Maggie, I won't pay." because the tax itself was a completely unjust levy on someone's existence - not because they thought they could pull a fast one and dodge it. I suppose in the end the distinction is superficial, legally speaking - even if the first scenario enjoys popular support. Whether or not someone refuses to pay tax on principle, or because they're scurrying away into the night with their ill-gotten swag for purely self-centered reasons, the state is still going to come after you. Unfortunately, honest people making a stand are far easier targets of course than non-doms.

The way to ensure taxes by companies and individuals are paid is to pass international legislation that all tax havens [under threat of prosecution if they don't] are made to supply upon request, details of a company's or individuals account to his/hers country's authorities. This would make it a level playing field for all the would be tax dodgers they would have no where to hide. Any false accounting to be heavily fined.

Lifting the lid on the Liechtenstiens of this world is perhaps a good place to start, but it is a retrospective approach that would only reclaim some of the revenue lost by tax evasion (or avoidance). I would like to go a stage further and introduce new rules whereby all transactions that involve currency leaving UK jurisdiction basically have to go through a clearing process - to try and catch dodgy dealings before they're done.

Why is it that it's only us minions must be subjected to arbitrary investigation by the inland revenue of every penny claimed or invested but the tax dodging wealthy are legally allowed hoard their capital in secret havens?

The nature of the nation-state is that it's powers of investigation are limited by funds, laws and geography. I agree 100% that individuals stuffing money into offshore black holes out of sight of the taxman is reprehensible. However, I think we need to look at smarter ways to prevent such practices, rather than grandstanding gestures that ultimately prove ineffective.

Also enforce a level of Tobin tax commiserative with what would be required to prevent another world financial meltdown.

What level would you reccommend as appropriate?

[Expounder]

I was referring more to the numerous brave, salt-of-t'earth working class people that turned round and said "F**k you Maggie, I won't pay." because the tax itself was a completely unjust levy on someone's existence - not because they thought they could pull a fast one and dodge it. I suppose in the end the distinction is superficial, legally speaking - even if the first scenario enjoys popular support. Whether or not someone refuses to pay tax on principle, or because they're scurrying away into the night with their ill-gotten swag for purely self-centered reasons, the state is still going to come after you. Unfortunately, honest people making a stand are far easier targets of course than non-doms.

Anyone who wasn't living in a rented or owned residence could dodge the poll tax intentionally or by default, [the wheels of local government turn slowly] and were useless to accommodate this insane idea introduced by someone with no brain, a big mouth, and a swinging handbag. The people who defaulted weren't to blame labour for councils in inner cities being pushed to the edge of bankruptcy. I often wonder if it was a deliberate ploy to sabotage every labour inner city council.

Lifting the lid on the Liechtenstein's of this world is perhaps a good place to start, but it is a retrospective approach that would only reclaim some of the revenue lost by tax evasion (or avoidance). I would like to go a stage further and introduce new rules whereby all transactions that involve currency leaving UK jurisdiction basically have to go through a clearing process - to try and catch dodgy dealings before they're done.

Well JAMC we seem both to agree on the same principle, but you seem to rejecting one idea which if flawed as you say [but the only idea on the table at the moment] are not proposing a possible alternative.

The nature of the nation-state is that it's powers of investigation are limited by funds, laws and geography. I agree 100% that individuals stuffing money into offshore black holes out of sight of the taxman is reprehensible. However, I think we need to look at smarter ways to prevent such practices, rather than grandstanding gestures that ultimately prove ineffective.

I might as well ask you the same question as you are the one who is rubbishing the Idea of using the Tobin tax which would be a start.

What level would you recommend as appropriate?

I'm not sure if it was you but someone in the thread mentioned 15%. When the financial wizards put their mind to it shouldn't take a lot of working out that's what they're paid for.

[Midas]

This argument doesn't apply (in theory) to the tobin tax because it would be applied across all jurisdictions. The factors that individuals and corporations weigh up when determining where their capital will reside will still remain of course, but there is now a 1% (or less) movement cost to be factored in.

I don't think there's any way that all jurisdictions will apply it! Look at the huge variation of tax bands and charges that different countries levy anyway, and that's something the OECD has been trying to 'rectify' (in other words penalise the more efficient, lower tax jurisdictions in favour of the inefficient high tax ones) for as long as I can remember. Even a few percent less can make one jurisdiction far more attractive to multi-billion pound organisations, and most countries are constantly seeking a competitive edge on their rivals - except Britain it seems - as you point out below.

In the example you mention below where the top rate of income tax has been raised from 40% to 50% in the UK, the question "should I move my money to somewhere that still has a 40% rate?" will still result in the same answer - i.e. Yes you should, because even if you have to pay the Tobin tax, it effectively means you would pay 41% rather than 50%.

[JAMC]

Depends how it's structured. Everything's up for grabs. There's been talk of the UN administering it. So, in that form, it would be a step towards world government.

But that's the whole point. At the moment we've already got world government but run by unelected, unaccountable, irresponsible bankers with politicians in their pockets. Bankers rule but the people pay. When the people get angry about paying, but not controlling, the bankers, the latter engage in blackmail, attempt to subvert the rules, or sulk.

Technically anything is possible, but that doesn't mean that anything is probable. To be honest I think the whole 'world government' issue is a thread in it's own right.

If Europe, the Yanks and the Japs sign up to Tobin it would be very difficult for other financial centres to resist. Ultimately they could simply have the tax applied to them on all money transfers going in and out of their jurisdictions. How would they respond? Go to war? Russia might, I suppose, but then who'd buy its gas? China's locked to the US as its major creditor. The last thing they want is a shooting war.

Having the tax applied in the manner you describe without a consensus is basically protectionism by another name. The big countries (except maybe Russia which seems to be intent on picking fights) may be somewhat reluctant to start wars over this kind of thing, but it could have the potential to ignite new conflicts in areas of the 3rd world where tensions already run high. Counties have fought wars over football in the past, a disagreement over the application of protectionist taxes could push places like Venezuela/Colombia, Armenia/Azerbaijan, Ethiopia/Eritrea over the brink.

Oh come on. Straw man central! No one on this thread has suggested it would. But Tobin would be a key symbolic and practical break with the past: bankers who act globally would be made financially responsible to those they exploit. It hits squarely on two, basic, democratic principles: no taxation without representation, and those with substantial power over others should be held accountable at the ballot box. Tobin, cleverly implemented, is explosive.

OK I was being slightly facetious, but I've highlighted the key word in your quote above - I have no time for gestures or measures that are primarily symbolic. It concerns me that people are jumping on the tobin bandwagon because it seems to offer an easy way of knocking the top hat off the rich man, but it offers no practical long term change to the nature of anything. I appreciate that the "all you're doing is criticisng the tobin tax, you're not putting forward any alternatives" argument has been raised a couple of times - I will attempt to gather my thoughts together into something coherent after posting this.

[JAMC]

Well JAMC we seem both to agree on the same principle, but you seem to rejecting one idea which if flawed as you say [but the only idea on the table at the moment] are not proposing a possible alternative.... I might as well ask you the same question as you are the one who is rubbishing the Idea of using the Tobin tax which would be a start.

OK I think there are a number of seperate smaller issues to be considered;

1. The banks have swallowed up huge quantities of taxpayers money to stay afloat
2. There is an important distinction to be made between commercial banking and investment banking
3. The financial services industry is a posterchild for greed, excess, recklessness and irresponsibility - i.e. the culture is rotten
4. The contagen has spread from the markets into the real economy, damaging the livelihoods of ordinary people

The only thing we can realistically do about point 1 is fully nationalise the banks in which the taxpayers how hold a majority stake, in order that we actually receive influence over the institutions we now collectively own. The crux of point 2 is that we all need high-street banks and the services they provide, I would suggest a greater degree of financial separation between commercial and investment banking in order to ensure that the activities of one arm doesn't suffocate the other. I would suggest something like a max of 20% capital flow between each entity per annum.

Point 3, bring the salaries of the nationalised financial institutions into line with the rest of the public sector. Sack anyone that squeals with derision.
Point 4, whether we want to admit it or not, we've collectively contributed to the mess by borrowing far more than we can afford. I would suggest a statutory cap on lending of 3.5% annual income for private individuals, and a similar limit for corporate lending based on revenue.

I would also reccommend an immediate halt to quantative easing and a return to sensible interest rates of 4-6%.

I'm not sure if it was you but someone in the thread mentioned 15%. When the financial wizards put their mind to it shouldn't take a lot of working out that's what they're paid for.

It was me that mentioned 15%.... as an example of a rate that would scupper any chance of the idea getting off the ground.

[Expounder]

OK I think there are a number of seperate smaller issues to be considered;

1. The banks have swallowed up huge quantities of taxpayers money to stay afloat
2. There is an important distinction to be made between commercial banking and investment banking
3. The financial services industry is a posterchild for greed, excess, recklessness and irresponsibility - i.e. the culture is rotten
4. The contagen has spread from the markets into the real economy, damaging the livelihoods of ordinary people

The only thing we can realistically do about point 1 is fully nationalise the banks in which the taxpayers how hold a majority stake, in order that we actually receive influence over the institutions we now collectively own. The crux of point 2 is that we all need high-street banks and the services they provide, I would suggest a greater degree of financial separation between commercial and investment banking in order to ensure that the activities of one arm doesn't suffocate the other. I would suggest something like a max of 20% capital flow between each entity per annum.

Point 3, bring the salaries of the nationalised financial institutions into line with the rest of the public sector. Sack anyone that squeals with derision.
Point 4, whether we want to admit it or not, we've collectively contributed to the mess by borrowing far more than we can afford. I would suggest a statutory cap on lending of 3.5% annual income for private individuals, and a similar limit for corporate lending based on revenue.

I would also reccommend an immediate halt to quantative easing and a return to sensible interest rates of 4-6%.


It was me that mentioned 15%.... as an example of a rate that would scupper any chance of the idea getting off the ground.

JAMC, I'm with you all the way except on the last point. I would agree with ending QE when we are guaranteed we're out of the woods and it's safe to do so.

Andy Haldane, the Bank of England's head of financial stability, calls the bankers' bluff | Business | The Observer

http://www.guardian.co.uk/business/2...nglandgovernor