[project2012] Re: G20 and CTT Tobin - a good tax in the FT

[Mark Barrett]

Great article, thanks Peter :-)

2009/10/3 Peter Fennell <peter at fennell.com>:
> Dear Mark,
>
> Here is a good tax
> http://www.ft.com/cms/s/0/69351f18-a941-11de-9b7f-00144feabdc0.html
>
> More commentary below.
>
> Regards,
> Peter
>
> ________________________________
> From: Mark Barrett <marknbarrett at googlemail.com>
> Reply-To: <southgatelondon at googlegroups.com>
> Date: Sat, 26 Sep 2009 23:24:08 +0100
> To: <project2012 at googlegroups.com>
> Cc: <southgatelondon at googlegroups.com>, <pbloomer at oxfam.org.uk>,
> <lholdoway at oxfam.org.uk>
> Subject: Re: [project2012] Re: G20 and CTT Tobin - window tax
>
> Hi Peter
>
>>I did not imply corruption. My point is about taxes: the virtue of a tax is
>> not in how you spend it but in what it does to society when you collect it.
>
>
> OK, point taken about the possibility of unforeseen consequences, but what
> did you mean by the comment about African deficits not being an argument for
> Tobin? Sorry, you’ll have to be more specific as I am a financial
> illiterate.
> I agree that African deficits are a good argument for increasing taxation.
> But not by Tobin tax.
>
> For the UK to fund part of Africa’s £43bn deficit (your figure), say 5%?
> would move us from 44.7% overall taxation to 44.9% (on 2008 figures). As a
> change to our existing tax burden that is negligible and therefore could not
> do any harm if collected through our existing tax regime. There is virtually
> zero economic cost so it’s just a matter of political will.
>
> On the economics, however, don’t do it by introducing a new tax unless it’s
> a good tax.
> In judging the merits of a new tax the important question is not ‘is there a
> good cause to spend it on?’ but ‘what effect will it have on society to
> collect it?’. The Window tax caused people to brick up windows – that was a
> bad tax.
>
> And anyway, what unforeseen consequences do you envisage (sorry for
> oxymoron)
> Tobin tax would cost more to collect than it raised in revenue and that
> would be bad in itself and bad for any cause being associated with it. All
> taxes on production and trade tend to distort the choices made by society
> and cause unemployment which is very bad.
>
> Example: if you tax labour heavily and not fossil fuel derived energy* then
> wherever there is a choice, machines will be used instead of people. Not
> because it is more efficient but because the tax system makes it falsely
> appear more efficient. That’s a recipe for unemployment at the low-skilled
> end of the market. (*) However, fuel for road vehicles is taxed very
> heavily. To the point where it falsely appears more efficient to fly food
> from New Zealand than truck it from Essex. That’s a good recipe for global
> warming.
>
> with proposed global regulation? And could these consequences really be so
> grave as to weigh heavier than the continued global inequality, resource
> depletion, terror threat
> Unemployment is the ultimate recruiting sargeant.
>
> caused by nations not working together, not raising global political
> sovereignty above global capital (which, as we know forces individual
> nations to compete with each other for a share of it, dividing and ruling
> over our politicians, who cannot afford to act unilaterally, or face capital
> flight, job losses, and consequently electoral defeat) ie do yr imaginary
> fears outweigh the moral need and political opportunity ti finally start
> reining it (capital) in for the global common good?
> If the whole globe became a single jurisdiction so that there were no
> ‘offshore’ places to transact then good taxes would still be good and bad
> ones bad. Bad ones also tend to fuel corruption (there now I’ve mentioned
> it!) eg. hiding things, calling them different names etc. That is corrosive
> of society’s moral substance and becomes costly to collect giving rise to
> armies of accountants and lawyers on both sides. Moveable capital can be
> translated into infinite forms to avoid tax.
>
> As you know , and sorry to belabour the point,  untaxed foreign exchange
> Taxes on trade cause unemployment. If it is really trade it should be
> untaxed. Much is speculative flows (gambling) but the answer to reducing
> that is not Tobin tax.
>
> and other global bank profits
> To be so profitable suggest a monopoly or cartel. If the issuing of credit
> is not being made efficient by competition then perhaps nationalisation is
> the right answer? Or auctioning licenses like we did with 3G bandwidth. And
> should do with football.
>
> amount to  a key portion of the global financial elite's free lunch (now
> even supported with billions of our tax money)
> Yes. If the speculative stuff had been done by different banks from those
> serving the real economy, then those different (merchant) banks could have
> been allowed to fail. Ending, possibly even paying off, the free lunch.
>
> yet while they munch on it (and effectively, vampires that they are,  us),
> at the same time, all around the world people starve and lack basic welfare
> rights ,rain forests get cut, and wars get fought over oil,
> all unecessarily.
>
> so why shy away from supporting the movement to  use a tiny proportion
> of these profits to support the multitude who are destitute and sort out
> these other problems,
> I agree – I’m just pointing out that Tobin won’t do it. It won’t deliver on
> that promise. It’s a technical point but to my mind crucially important.
>
> when public opinion is so ripe for it? now is the time for the global
> sovereign to take shape!
>
>>The window tax caused windows to be bricked up.
> Yes, but the theft of the world's natural resources - our resources - and
> the destruction of ancestral lands in the name of corporate profits and
> shareholder dividends is the real daylight robbery and only an
> international governmental movement can do anything about it. and,
> ultimately that means taxes
> Yes – let’s use good taxes not bad ones.
>
>> 'All major countries' would not be enough. A Switzerland, Hong Kong,
>> Dubai, Liberia or Jersey could do very well out of being the world's free
>> currency exchange.
>
> I agree. What I meant and should have said was, 'led and enforced globally
> by all major countries'. definitely CTT cannot work unless it is global -
> which is why I think the leaders are edging towards an ever more determined
> / pre-planned and permanent global economic forum, and why we should do our
> bit to push them into it further and faster in case anything comes up that
> could stop them.
>
> hopefully - with Copenhagen coming in December to add
> further grassroots pressure to the process -  it will have the momentum for
> Tobin. With China, India and others in the G20 from the 'developing' world
> it all looks very promising. an increasingly powerful China is pushing for
> more economic support for the global south, see
> http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6850185.ece
> and China has already gone on record in favour of a new global sovereign
> currency ie promising for a profoundly changed global economic order.
>
>
>>Income Tax is a bad tax because it discourages employment.
>
> Agreed. Progressively abolish / exempt the masses and bring in a sensitively
> structured/blended Land Value Tax (the voters will take some work to be
> convinced of course, see today's "that's my home, get your dirty tax hands
> of it"
> http://www.timesonline.co.uk/tol/comment/columnists/matthew_parris/article6850124.ece
>
>> Banks. I would advocate separating the speculative stuff from the 'real
>> economy' banking. See Dirk Bezemer http://mpra.ub.uni-muenchen.de/15892/
>
> Agreed,bring back glass steagal act
> http://en.wikipedia.org/wiki/Glass-Steagall_Act or something similar
> Exactly
>
>> Closing tax havens could be good.
>
> Which , to go back to the earlier point surely requires all the countries,
> as much as CTT Tobin/
> They are a symptom of bad taxes. You mention Land Value Tax, or North Sea
> Oil regime, or UK 3G licenses – these cannot be avoided by moving wealth
> ‘off shore’. That is one of the tests of why they are good taxes and Tobin
> is not. If you replaced the bad taxes with good ones, the offshore havens
> would wither away for lack of use.
>
> Presumably that's why they started there ,at G20 London, with commitment to
> that, if I recall correctly. So if you're in favour of that, why not go
> whole hog with Tobin?
>
> Hate the idea of global government?
> I’m not holding my breath.
> Incidentally who do you have in mind for president?
>
> Me, I hate the reality of the global capitalist more!
>
> Love
> Mark
>
>
>
>
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-- 
"We hear men speaking for us of new laws strong and sweet /Yet is
there no man speaketh as we speak in the street.”