Europe Takes the Lead in Drive to Tax Speculators

[no_hypocrisy]

On March 8, the European Parliament voted 360-299 in favor of introducing financial transactions taxes, tiny levies on trades of stocks, derivatives, currency, and other financial instruments. The proposal could generate an estimated $200 billion per year in revenue for European governments to channel into job creation and other urgent needs. At the same time, it would discourage the type of risky, short-term speculation that got us into this economic mess in the first place.

What's most astounding is that the tax proposal sailed through despite the European Parliament's strong right-wing majority. Yes, there are still places in the world where folks from across the political spectrum can have a rational discussion about fair taxation.

The vote came after more than a year of global advocacy by labor union, anti-poverty, environmental, and other citizens groups. On February 17, activists in 25 countries carried out a Global Day of Action. See this video and this map to get a sense of the breadth of this campaign, from Nepal to Mexico in the global South and from Canada to Japan in the North. German activists staged one of the most elaborate publicity stunts. They dressed up as glamorous Robin Hoods and Maid Marians to crash the Berlinale film festival, arriving in a white limousine and then parading down their own red carpet.

-snip-

This week's vote signaled that many key European leaders are no longer willing to let the Obama administration hold them back. The Parliament's resolution calls on the EU to adopt transactions taxes, regardless of whether the United States or other major economies take similar action.

On the bright side, the United States doesn't appear to be actively trying to block European progress. This is a pretty big deal, considering that President Barack Obama stacked his European embassies with former financial executives (e.g., former Citigroup Vice Chair Louis Susman in London and former Goldman Sachs executive Philip D. Murphy in Berlin) and the Wall Street lobby would no doubt love the administration's help in preventing what for them would be an unnerving precedent.

The campaign for Europe to pioneer financial transactions taxes is, however, far from over. The European Parliament has clout as a directly elected body, but it does not have binding authority over taxation matters. National governments will make the final decision, and while heavyweights Germany and France are strongly in favor, there are some problematic holdouts, namely Italy and the UK. The European Commission, the civil service for the EU, is also not yet convinced.

http://www.commondreams.org/view/2011/03/10-16

[SoCalDem]

1. They NEED to be taxed..and there needs to be transaction levies too

As computers process all their bets 24-7, a small fee attached to each "trade" would go a long way to helping with our insolvency:)

[KittyWampus]

5. It's a great idea.

[Mnemosyne]

2. Needs to spread worldwide. K&R n/t

[Travis_0004]

3. Not all derivatives are specualtion, some are basic tools that are required to conduct business.

If the tax is small enough, then businesses will get by, but since derivatives trading can be done anywhere, I wonder if oversees firms will switch to derivatives trading in the United States.

[KittyWampus]

4. How exactly is the Obama Adminstration "holding them back?" In REAL terms. Europeans like demonizing

the USA the same way many Middle Eastern countries do and some crank leftwingers here in the USA do.


"and the Wall Street lobby would no doubt love the administration's help in preventing what for them would be an unnerving precedent."

How EXACTLY would the Admin actually do this?

What a loaded piece of crap this article ends up being.

And how nice of the writer to point out the fact that each national government still has to vote.

[muriel_volestrangler]

7. This is how:

Prime Minister Brown continues to press hard for international adoption of a Tobin Tax, despite being aware of U.S. opposition to the tax. He has raised this issue - and bonuses - on several occasions directly with the Ambassador, and said that he saw cooperation on financial services and Afghanistan as the critical elements of U.S.-UK relationship. Brown first highlighted the Tobin Tax at the November G-20 Ministerial in St. Andrews, and subsequently told Ambassador that he was disappointed that Treasury Secretary Geithner publicly refused to support the UK position. The political opposition in the UK also is questioning the lack of U.S. support. The PM is using the issue for domestic political gain but also for reasons of "social justice." The UK may feel emboldened on this issue, given French Foreign Minister Kouchner's proposal at COP-15 for an international tax on financial services for programs for poverty reduction and climate change, and would likely criticize the U.S. if there were no further international movement on this issue.
...
The UK financial sector has been rather muted in its comments, preferring to remain silent unless and until the government makes an actual proposal. JP Morgan officials told us that the firm is opposed to the idea of a Tobin tax and is particularly concerned about the difficulty of implementation, which would need to be universal to avoid regulatory arbitrage. They also said there would be intense lobbying to exempt some transactions from a tax, predicting that U.S. treasuries, other government bonds and sovereign debt would be excluded from such a tax. The tax would be even more discriminatory since it would only target transactions of private firms and individuals.
http://www.guardian.co.uk/world/us-embassy-cables-documents/238904

Courtesy of Wikileaks. The link is in the article, after it says "While not publicly offering much of an explanation, U.S. Treasury Secretary Timothy Geithner has reportedly consistently dismissed the idea at G-20 meetings."

I'll point out the Institute for Policy Studies is American, as is Sarah Anderson.

[KittyWampus]

8. Wow. Some express disapproval & lobby WOW! But again, you didn't answer my

question.

And for the record, this is a great idea.

But I will state again how convenient it is to blame the USA for everything.

Italy and the UK would probably like to blame the USA. We WOULD have voted for it but bla bla bla.

Please.

[muriel_volestrangler]

10. A Tobin Tax does need to be implemented in all major markets

otherwise the speculators would just do it all in the market, such as Wall Street, that didn't implement it. So if Geithner is saying "no, we won't do this, JP Morgan doesn't like it", then the Obama government is holding back the world.

I will state again that Sarah Anderson is American, and she is blaming the USA, convenient or not.

Why do you think this doesn't answer your question?

[joeglow3]

6. What would the tax be and would I get dicked?

I am a middle class accountant who believes strongly in dollar cost averaging into index funds. I am able to invest about $100 a week (usually broken up into 2 $50 trades a week). I fail to see how my 104 trades a year really hurt anyone (I have not sold anything in 7+ years). I would support it if it doesn't screw honest people like who are merely trying to save for retirement.

Maybe they can only tax the sales if the investment is held for less than a period of time (say, one year).

[ej510]

9. Wall St hasn't finished draining the blood from the rest of the country yet.